---
title: "Supermicro Stock Just Jumped 20%. Why I'm Passing and Buying This AI Leader Instead."
type: "News"
locale: "en"
url: "https://longbridge.com/en/news/293821346.md"
description: "Despite Supermicro's stock jumping 20% on strong preliminary Q2 results and improved margin guidance, the author advises against buying it due to its low-margin integrator model, recent controversies, and temporary margin boosts from supply shortages. Instead, the article recommends investing in Nvidia (NVDA), highlighting its dominant position in AI infrastructure, significantly higher gross margins (~75%), and attractive valuation as a safer, smarter long-term bet amidst sustained high demand for AI chips."
datetime: "2026-07-25T11:34:49.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/293821346.md)
  - [en](https://longbridge.com/en/news/293821346.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/293821346.md)
generator: "portal-rs"
---

# Supermicro Stock Just Jumped 20%. Why I'm Passing and Buying This AI Leader Instead.

**Super Micro Computer** (SMCI -3.53%) shares surged nearly 20% on July 22 after the company pre-announced strong preliminary results. While its second-quarter revenue is expected to come in toward the low end of its $11 billion to $12.5 billion range, that is still about double the revenue it generated a year ago. More importantly, it projected that its gross margins would rise to a range of 15% to 17%, well above its 8.2% to 8.4% guidance.

Supermicro, which designs and assembles servers and rack solutions for data centers, has struggled with margins, so this is a piece of welcome news. However, this is generally a low-margin business, and the surprising jump in margins is likely largely due to supply shortages.

Expand

![Super Micro Computer Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL1NNQ0kucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

## NASDAQ: SMCI

Super Micro Computer

Today's Change

(-3.53%) $-1.10

Current Price

$30.10

### Key Data Points

Market Cap

$19BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$29.27 - $31.33

52wk Range

$19.48 - $62.36

Volume

49.7M

Avg Vol

54.1M

Gross Margin

8.39%

There have been shortages of key AI infrastructure components for things like memory, central processing units (CPUs), and graphics processing units (GPUs), so hyperscalers and enterprises that want complete systems right away are more likely to pay up for a complete system from an integrator. A shift toward enterprise or sovereign clients, which have less buying power, can also positively impact margins.

That said, this dynamic could be temporary, and Supermicro is still, by and large, a low-margin middleman. It also has a history of controversy, and its offices in Taiwan were raided at the end of June, related to employees smuggling chips to China. So instead of owning Supermico shares, I think buying **Nvidia** (NVDA -1.01%) is the much safer and smarter bet.

![Nvidia and Supermicro logos.](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vZWRpdG9yaWFsL2ltYWdlcy84ODAxOTIvc21jaW52ZGEucG5nJnc9Mzg0MA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

Image source: The Motley Fool.

## Nvidia is the better stock to own

Expand

![Nvidia Stock Quote](https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-b3A9cmVzaXplJnVybD1odHRwczovL2cuZm9vbGNkbi5jb20vYXJ0L2NvbXBhbnlsb2dvcy9tYXJrL05WREEucG5nJnc9MTI4?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

## NASDAQ: NVDA

Nvidia

Today's Change

(-1.01%) $-2.10

Current Price

$206.66

### Key Data Points

Market Cap

$5.0TMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$204.81 - $211.90

52wk Range

$164.07 - $236.54

Volume

3.9M

Avg Vol

155.1M

Gross Margin

74.15%

Dividend Yield

0.14%

Supermicro and most other integrators build their servers around Nvidia GPUs, so the strong demand it is seeing and its ability to boost margins speak volumes to the current high-demand environment for Nvidia's chips and components. In fact, this can be a great leading indicator.

When looking at where most of the value resides, this is with Nvidia and its GPUs. Supermicro is largely passing along high GPU prices to its customers; that's why its revenue is so high and its gross margins are generally low. Nvidia, on the other hand, has gross margins around 75%. So, what is good news for Supermicro is ultimately even better news for Nvidia, and you are getting a much more attractive company in Nvidia with a lot less controversy. 

As Supermicro's preliminary Q2 numbers show, there is no current let-up in demand for AI infrastructure. At the same time, earlier commentary and an increase in capex from leading foundry **Taiwan Semiconductor Manufacturing** also point to strong long-term demand. With the king of AI infrastructure trading at a forward P/E of only 16 times fiscal 2028 (ending January 2028) estimates, investors don't need to overthink this and can just buy the stock of the high-quality market leader.

### Related Stocks

- [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md)
- [SMCI.US](https://longbridge.com/en/quote/SMCI.US.md)
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- [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md)
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## Related News & Research

- [Franklin Street Advisors Inc. NC Sells 42,772 Shares of NVIDIA Corporation $NVDA](https://longbridge.com/en/news/296581439.md)
- [SMCI Stock Alert: What to Know as Super Micro Computer Wraps Investigation](https://longbridge.com/en/news/296529809.md)
- [NVDA Stock Alert: Nvidia CEO Jensen Huang Says Chips Are ‘Investable Asset Class’](https://longbridge.com/en/news/296001978.md)
- [Nvidia Will Report Q2 Earnings on August 26. Let's Look at Who Owns NVDA Stock](https://longbridge.com/en/news/295958031.md)
- [NVIDIA Corporation $NVDA is Fulton Bank N.A.'s 10th Largest Position](https://longbridge.com/en/news/296581895.md)

---
> **Disclaimer: This article is for reference only and does not constitute any investment advice.**