'It's Hard to Get Excited,' Says Top Investor About SMCI Stock

It's never dull when it comes to Super Micro Computer (NASDAQ:SMCI). What began as a steady climb into the center of the AI race has evolved into one of Wall Street's more unpredictable rides, with the past 18 months delivering more plot twists than many investors expected.TipRanks Cyber Monday Sale Claim 60% off TipRanks Premium for data-backed insights and research tools you need to invest with confidence. Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off Back on October 23, weeks before the company reported Q1 Fiscal Year 2026 results, management warned that quarterly revenue would come in below its earlier $6–$7 billion outlook. The reason? Recent design wins had pushed a meaningful portion of sales into the following quarter. To soften the blow, executives reiterated confidence in their full-year guidance of at least $33 billion. Having been burned in the past, however, the market wasn't so forgiving this time around. SMCI's share price, which had been moving upward for the bulk of 2025, has dropped precipitously since the news broke. All told, SMCI has lost 353% of its value since the late October company update. However, the longer-term picture isn't entirely grim. The company remains a long-standing Nvidia partner and has recently confirmed an expanded collaboration tied to Nvidia's next-gen Vera Rubin architecture. Could this help SMCI regain its momentum in the year ahead? Not according to top investor Will Ebiefung, who isn't getting carried away. "It's hard to get excited about the long-term potential of a data center equipment provider that is failing to grow during a massive data center boom," says the 5-star investor, who is among the top 3% of stock pros covered by TipRanks. Ebiefung is concerned about SMCI's top- and bottom-line growth, noting that the company's net sales of $5.02 billion in the last quarter represent a 15% decline from the previous year. In addition, the company's margins are also shrinking, slumping from 13.1% to 9.3% in just one year. The falling margin is an acute concern for Ebiefung, and he blames competition in the server market. A big culprit is Taiwanese firms, some of whom are even selling servers at gross margins in the low single digits. Ebiefung also isn't tempted by a forward price-to-earnings multiple of ~17x, where SMCI's share price is trading after a historically bad month and a half. Though this is cheaper than the S&P 500 average of 22x, the investor believes that SMCI has earned this discounted valuation. "The next five years will be challenging, and shares have a very high likelihood of underperforming the market," concludes Ebiefung. (To watch Will Ebiefung's track record, click here) Meanwhile, sentiment among Wall Street analysts leans more conflicted. With 5 Buys, 5 Holds, and 2 Sells, SMCI lands at a Neutral (i.e., Hold) consensus. Yet, the average 12-month price target sits at $46.82, suggesting the potential for ~34% gains from current levels. (See SMCI stock forecast)