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SMCI trades against a final fair-value range of $48.45-$105.45, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs. Fair value range: low $48.5, high $105, with mid-point at $71.4.
Stock analysis

SMCI SMCI fair value $48–$105

SMCI
By StockMarketAgent.AI team· supervised by
Analyzed: 2026-05-10Next update: 2026-08-10Methodology v2.5Review: automatedArchetype: Cyclical
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Last price
$35.37
▲ +36.02 (+101.84%)
Fair value
$71
$48–$105
Rating
Strong Buy
confidence 75/100
Upside
+101.8%
upside to fair value
Margin of Safety
$60.68
MoS level · 15%
Market Cap
$21.2B
P/E fwd 11.0

§1 Executive summary

  • Composite fair value $71 with high case $105.
  • Implied upside of 101.8% to fair value.
  • Moat 3/10 · confidence 75/100 · Cyclical.
  • Trades below fair value with a meaningful cushion to the midpoint.
Fair value
$71
Margin of safety
+50.5%
Confidence
75/100
Moat
3/10

Educational analysis only — not financial advice. Always do your own due diligence.

$35.37Price
Low $48.45
Mid $71.39
High $105.45

SMCI trades against a final fair-value range of $48.45-$105.45, with the midpoint set by the accepted valuation synthesis rather than earlier draft model outputs.

  • First-to-market advantage in specialized liquid
    First-to-market advantage in specialized liquid cooling for AI servers
  • Tight engineering integration with Nvidia
    Tight engineering integration with Nvidia for accelerated time-to-market
  • Bull thesis
    Internal valuation cross-checks ($36.75) views SMCI strictly as a peak-cycle value trap with immediate mean-reverting multiples.

§2 Bear case

A sudden cyclical downturn in AI infrastructure build-outs alongside a working capitalWorking capitalCurrent assets minus current liabilities. The capital tied up in the operating cycle (receivables and inventory) net of trade financing (payables). trap could freeze liquidity. SMCI's cash conversion is exceptionally poor; an inventory glut and forced price cuts would rapidly deplete its cash buffer, pushing free cash flowFree cash flowOperating cash flow minus capital expenditures. The cash a business generates after maintaining and growing its asset base — the closest accounting proxy for owner-economics. deeply negative and forcing dilutive capital raises.

Ways this thesis can break

AI Capex Normalization

· Medium

Hyperscaler demand plateaus before broad enterprise demand matures, stranding SMCI with excess manufacturing capacity.

FV impact
-32% to $48.45 Floor
Trigger
12-24 months

Nvidia GPU Allocation Squeeze

· Low

Nvidia prioritizes other OEMs or direct hyperscaler relationships, choking SMCI's core revenue growth engine.

FV impact
-25% to Fair Value
Trigger
6-12 months

Structurally Crushed Margins

· High

Aggressive pricing wars in commodity server assembly compress SMCI operating margins below 4%, destroying intrinsic owner earnings.

FV impact
-40% to Fair Value
Trigger
12-18 months
Early-warning signals to monitor
MetricCurrentTrigger threshold
Operating margins slipping below 5.0% for two consecutive quartersMonitorDeterioration versus the report thesis
Days in inventory increasing significantly against historical averagesMonitorDeterioration versus the report thesis
Major cloud provider switching to white-box or competitor infrastructureMonitorDeterioration versus the report thesis
Rising cost of debt on short-term working capital facilitiesMonitorDeterioration versus the report thesis
Forward EPS internal valuation cross-check downgrades exceeding 10%MonitorDeterioration versus the report thesis

§3 Financial history

Income statement — last six periods
Line itemT−0T−1T−2T−3CAGR
Period2022-06-302023-06-302024-06-302025-06-30Trend
Revenue$5.20B$7.12B$14.99B$21.97B+61.7%
Gross profit$800.0M$1.28B$2.06B$2.43B+44.8%
Operating income$335.2M$761.1M$1.21B$1.25B+55.2%
Net income$285.2M$640.0M$1.15B$1.05B+54.4%
EPS (diluted)$0.53$1.14$2.01$1.68+46.7%
EBITDA$375.7M$799.7M$1.27B$1.33B+52.4%
R&D$272.3M$307.3M$463.5M$636.6M+32.7%
SG&A$192.6M$214.6M$387.1M$540.4M+41.1%

Quality scores

Piotroski F-score
5 / 9
0–9 quality composite
Altman Z-score
4.71
Bankruptcy risk (>3 safe)
Beneish M-score
-2.44
Earnings manipulation risk
OCF / Net income
1.58×
>1 indicates high earnings quality
Accounting quality gate
Pass
Sector-adjusted gate
ROIC
9.1%
Return on invested capital
§3

Numbers analysis

Cash flow

Cash-flow quality is reflected in the OCFOperating cash flowCash generated from the company's core operations after working-capital changes but before capital expenditures. The first line of the cash-flow statement. / net incomeNet IncomeNet Income is an income-statement line item used to reconcile revenue to operating profit, pre-tax income, net income, or per-share earnings. It should be compared across periods and against peer disclosure conventions., accounting-quality, and ROICROICReturn on invested capital. Operating profit (after tax) divided by invested capital. The single best gauge of capital-efficiency. Spread over WACC = economic value created. rows above.

Capital allocation

Capital allocation should be evaluated against reinvestment needs, balance-sheet strength, and shareholder returns.

Individual subscribers — §4 onwards11 more sections

Read the full analysis — 11 more sections.

Competitive moat, industry cycle, peer comparison, intrinsic valuation, sensitivity, scenarios, earnings decision tree, position management, investor perspectives, scorecard, and final recommendation.

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FAQ

SMCI — frequently asked questions

  1. Based on our latest analysis, SMCI looks meaningfully undervalued. The current price is $35.4 versus a composite fair-value midpoint of $71.4 (range $48.5–$105), which implies roughly 101.8% upside to the midpoint.

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