Jan. 15 at 12:47 AM
$SMCI Hard to believe that a 20 something rookie analyst with limited real world experience can issue a single opinion and vaporize nearly a billion dollars of shareholder value in one day. A quick downgrade and price target cut, without any material change in fundamentals, triggers a billion dollar sell off. This kind of power should come with deep responsibility, but instead is done with basic analytics with little thought to company strategy and market positioning.
The market value is being destroyed on perception alone, driven by lower margins and analysts who have never built a business and usually know very little about the business they are telling the world to sell. Fundamentals are long term and perception is short term. Analysts are mostly looking at the next quarterly report, which in our case, revenue should be fantastic, though margins will likely be disappointing.
A business owner is looking at a 5 year infrastructure cycle, not this quarter’s stock price. When an analyst downgrades SMCI because of a gross margin dip, without accounting for the fact that the dip is largely the result of investing in building the infrastructure to support
$100 billion in annual revenue and competitive pricing to win the largest contracts in the world, their opinions are meaningless to the long term.
When a major bank issues a downgrade, it triggers retail panic and institutional Sell algos. These algos don’t read “company strategy,” they read "Price Target Lower" and execute. It’s perception, not reality, and it’s temporary.
The reality is that by 2030, AI infrastructure spend is estimated at 6.7 trillion. 64% of that, or
$4.3 trillion, is estimated to be for the servers and related equipment. Supermicro has an estimated 8% to 9% of that global market share right now. If they simply maintain this position, we are looking at possible revenue totals of
$340 to
$380 billion total over the next 4 to 5 years.
This dip does not change the long investment, and for me, this has 0 effect on my perception other than I wired more money into my trading account today so I can continue buying.
