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Wondering if Super Micro Computer is a bargain right now? You’re not alone, as plenty of investors are trying to figure out what’s driving this stock and whether there’s still value to be found.
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Although Super Micro Computer has cooled off with a 1.6% drop over the last week and a 2.3% dip in the last month, it’s still up 68.9% year-to-date and a staggering 95% over the past year. This hints at both growth potential and shifting risk perceptions.
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Recent headlines have highlighted Super Micro’s expanding role in high-performance computing, particularly with new partnerships in the artificial intelligence hardware space. Ongoing interest from major tech players and increased demand for AI servers are fueling attention and also adding some volatility to recent price movements.
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On the valuation front, Super Micro Computer scores just 1 out of 6 on key undervaluation checks, so the surface-level numbers might suggest it’s on the expensive side. There is more to this story. We’ll break down the usual valuation approaches shortly, and stick around because we’ll share one method at the end that many investors overlook.
Super Micro Computer scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and then discounting those amounts back to today’s value. This approach relies on analyst forecasts for the next several years and then extends those estimates further into the future for a longer-term view.
For Super Micro Computer, the current free cash flow stands at $1.52 billion. Analyst projections expect that free cash flow will fluctuate over the coming years, with estimates showing it decreasing to $653 million by 2028. Beyond this window, the DCF model extrapolates future cash flows out another five years, using assumptions based on both recent performance and industry expectations.
Based on these projections and after discounting to the present, the DCF model calculates an intrinsic value of $3.65 per share for Super Micro Computer. This value is dramatically lower than its current market price. This implies the stock is trading at a 1288.6% premium to estimated fair value.
In summary, the DCF model suggests Super Micro Computer is heavily overvalued at the current share price, indicating that investors may be pricing in lofty expectations for future growth and profitability.
Result: OVERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Super Micro Computer may be overvalued by 1288.6%. Discover 843 undervalued stocks or create your own screener to find better value opportunities.
SMCI Discounted Cash Flow as at Nov 2025
The Price-to-Earnings (PE) ratio is a go-to valuation metric for profitable companies like Super Micro Computer, as it measures how much investors are willing to pay today for a dollar of current earnings. A higher PE often signals expectations for future growth, whereas a lower PE can sometimes reflect either undervaluation or higher perceived risk.
Super Micro Computer currently trades at a PE of 28.8x, which is noticeably above both its industry average of 23.2x and the average for its peer group at 22.8x. Looking beyond these simple benchmarks, the PE ratio an investor should accept really depends on expectations for future earnings growth, profit margins, and the company’s risk profile. These factors can justify a premium if investors believe robust growth is ahead or penalize a stock if risks are elevated.
Rather than relying solely on industry or peer comparisons, Simply Wall St’s “Fair Ratio” provides a more nuanced benchmark. It takes into account Super Micro Computer’s earnings growth, profit margins, risks, industry dynamics and even market capitalization. For Super Micro Computer, the Fair Ratio lands at a much higher 75.1x. Since the current PE (28.8x) is well below this Fair Ratio, this suggests the stock could be attractively valued based on its expected growth and risk profile.
Result: UNDERVALUED
NasdaqGS:SMCI PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1410 companies where insiders are betting big on explosive growth.
Earlier we mentioned that there’s an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your own story and perspective about a company’s future, linking what you believe about its business, industry trends, and potential to an actual set of financial forecasts and a fair value estimate.
With Narratives, you can move beyond just looking at historical numbers and ratios. Instead, you set your assumptions for revenue growth, profit margins, and valuation multiples, combining everything you know (and expect) about Super Micro Computer into a living forecast. Narratives make valuation more accessible for all investors. Millions are already sharing and comparing them on Simply Wall St’s Community page, which guides you step-by-step to connect the company’s story with key numbers.
Whenever new news or earnings come in, Narratives auto-update so you can continually track whether fair value stacks up against the current share price. This can help you time your buy or sell decisions more confidently.
For example, on Simply Wall St, some investors see upside with fair values as high as $74.53 (anticipating 50% annual revenue growth and long-term AI hardware leadership), while others are more cautious, setting fair value as low as $15 (factoring in governance risks and competitive pressure). Your Narrative lets you express, revise, and act on your unique view.
For Super Micro Computer, we’ll make it really easy for you with previews of two leading Super Micro Computer Narratives:
🐂 Super Micro Computer Bull Case
Fair value: $74.53
Current price is 31.9% below this fair value
Revenue growth used: 50%
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Expects SMCI to capitalize on management’s ambitious $23 to $25 billion revenue target for 2025 and $40 billion for 2026, driven by the adoption of new Direct Liquid Cooling (DLC) technology in the data center market.
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Recent governance actions, such as hiring a new auditor and forming a special committee after prior short-seller allegations, are seen as restoring confidence. The company has rebounded strongly, off recent lows.
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Highlights strong partnerships with NVDA, AMD, xAI, and Intel, viewing SMCI as a leading provider of AI data center infrastructure, with bullish 50% annual revenue growth forecasts and fair value estimates up to $126.52.
🐻 Super Micro Computer Bear Case
Fair value: $50.59
Current price is 0.3% above this fair value
Revenue growth used: 28.62%
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Analysts see global AI demand, new product launches, and expansion into higher-margin solutions and geographies fueling mid-to-high 20 percent annual revenue growth, but with risks of margin compression and volatility due to reliance on a few large customers and hardware commoditization.
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Valuation leans on analyst consensus for 2028 earnings ($2.4 billion), a 5.14% net margin, and a future PE ratio of 16.19x, resulting in a fair value target only slightly above the current share price.
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Cautions include potential loss of major customers, risks from delayed chip cycles, price wars, supply chain challenges, and execution risks in new platforms. The narrative urges investors to challenge analyst assumptions with their own research.
Do you think there’s more to the story for Super Micro Computer? Head over to our Community to see what others are saying!
NasdaqGS:SMCI Community Fair Values as at Nov 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SMCI.
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