Super Micro Computer, Inc., together with its subsidiaries, develops and manufactures high performance server and storage solutions based on modular and open architecture in the United States, Europe, Asia, and internationally. Its solutions range from complete server, storage systems, modular blade servers, blades, workstations, full racks, networking devices, server sub-systems, server management software, and security software. The company provides application-optimized server solutions, rackmount and blade servers, storage, and subsystems and accessories; and server software management solutions, such as Server Management Suite, including Supermicro Server Manager, Supermicro Power Management software, Supermicro Update Manager, SuperCloud Composer, and SuperDoctor 5. In addition, it offers server subsystems and accessories comprising server boards, chassis, power supplies, and other accessories. Further, the company provides server and storage system integration, configuration, and software upgrade and update services; and technical documentation services, as well as identifies service requirements, creates and executes project plans, and conducts verification testing and technical documentation, and training services. Additionally, it offers help desk and on-site product support services for its server and storage systems; and customer support services, including ongoing maintenance and technical support for its products. The company provides its products to enterprise data centers, cloud computing, artificial intelligence, and 5G and edge computing markets. It sells its products through direct and indirect sales force, distributors, value-added resellers, system integrators, and original equipment manufacturers. The company was incorporated in 1993 and is headquartered in San Jose, California.

Super Micro Computer, Inc.

The S&P 500 experienced its longest losing streak of 2025, dropping for five consecutive trading days as of Thursday. It is also the first time this year that the index has endured such a drop, according to Dow Jones Market Data.
The S&P 500 declined 1.5% over the past five sessions, pressured by selling in big tech names as investors rotated away from the tech sector on AI bubble fears and overvaluation concerns. This downturn was exacerbated by disappointing Target TGT and Walmart WMT earnings, renewed tariff impacts and fading hopes of a Fed rate cut in September (read: Value Outshines Growth: 5 ETF Winners Over the Past Week).
Ahead of Powell's speech, CME Group's FedWatch Tool is currently indicating a 73.6% chance that the Fed will lower rates by a quarter point next month, down from 92.1% a week ago.
The market sell-off has fueled a rally in inverse single-stock ETFs. Inverse single-stock ETFs are designed to deliver the opposite daily return of a specific company’s stock by using derivatives. For example, if the underlying stock drops 1% in a day, the inverse ETF targeting that stock would ideally increase about 1%.
Some ETFs offer leveraged exposure, such as -2x or -3x, which attempt to deliver two or three times the inverse of the stock’s daily move. This allows investors to gain inverse exposure to a particular stock without having to sell the stock directly.
We have highlighted five inverse single-stock ETFs that have gained in double digits over the past week (see: all the Single Stock ETFs here).
Defiance Daily Target 2X Short PLTR ETF (PLTZ) – Up 30.6%
Defiance Daily Target 2X Short PLTR ETF offers two times the opposite of the daily percentage change in the share price of Palantir Technologies PLTR. The stock has fallen 17% since its peak on Aug. 12 and shed about $73 billion in market cap over just six sessions, marking its worst streak this year.
Defiance Daily Target 2X Short MSTR ETF (SMST) – Up 25.1%
Defiance Daily Target 2X Short MSTR ETF seeks daily inverse leveraged investment results of 200% the daily percentage change in the share price of Strategy MSTR. MSTR shares slumped 10.5% over the past week to the lowest level since April 21.
Defiance Daily Target 2X Short IONQ ETF (IONZ) – Up 19.4%
Defiance Daily Target 2X Short IONQ ETF seeks inverse daily investment results of two times the daily percentage change in the share price of IonQ Inc. IONQ. The stock is down 10.4% over the past week.
GraniteShares 2x Short COIN Daily ETF (CONI) – Up 16%
GraniteShares 2x Short COIN Daily ETF offers two times the inverse daily performance of the Coinbase Global COIN. Coinbase is down 7.6% over the last five trading days.
Defiance Daily Target 2X Short SMCI ETF (SMCZ) – Up 15.7%
Defiance Daily Target 2X Short SMCI ETF seeks daily inverse investment results of two times the performance of Super Micro Computer SMCI. Shares of SMCI slumped 7% in the same time frame.
Risks of Investing in Inverse Single-Stock ETFs
While inverse single-stock ETFs surge amid the sell-off, they come with significant risks due to their lack of diversification and exposure to the volatility of a single stock. They are typically more suited for experienced investors who understand and are willing to accept these risks. Here are some of the downsides of these ETFs:
Daily Reset and Compounding Risks: The performance of inverse ETFs could vary significantly from the actual performance of their underlying stock over a longer period when compared to a shorter period (such as weeks or months). These funds run the risk of huge losses in fluctuating or seesawing markets.
Risk of Significant Losses: As the ETF is tied to a single stock, a surprise rally in the company’s shares can quickly erode gains and generate steep losses for inverse ETF holders.
High Costs: Liquidity can be a big problem, as it can make the products more expensive than they appear. Expense ratios for inverse single-stock ETFs are often significantly higher than those of traditional ETFs. Over time, these fees can eat into returns, particularly if the ETF is held longer than intended (read: AI Fatigue Hits Tech Biggies: Inverse ETFs in Focus).
Not Suitable for All Investors: These ETFs work best for short-term hedging or speculation and are suitable only for short-term traders, as these are rebalanced on a daily basis.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Big Tech Woes Power Surge in Inverse Single-Stock ETFs

Key Points
Super Micro Computer stock fell by over 20% after the company’s latest quarterly earnings release on Aug. 5.
The artificial intelligence (AI) data center builder’s shares have found support, but this could be temporary.
As three key issues with Supermicro persist, shares could keep on sinking.
On Aug. 5, 2025, Super Micro Computer (NASDAQ: SMCI) released results for the company's fiscal fourth quarter, ending June 30, 2025. The artificial intelligence (AI) server maker's shares fell by over 20% on disappointing results and guidance.
Since then, the stock has started to retreat. However, perhaps the dust hasn't settled, and this could instead be the calm before the storm.
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Three issues persist, all of which could continue to impact Supermicro's growth, profitability, and the value of its shares: falling market share, squeezed margins, and the threat of losing key customers.
Why SMCI stock tanked after earnings
On both revenue and earnings, Supermicro's Q4 FY2025 results fell short of analysts' expectations:
Metric
Analyst Forecast (Q4 2025)
Actual Results (Q4 2025)
Revenue
$6 billion
$5.8 billion
Adjusted earnings per share (EPS)
$0.45
$0.41
On a year-over-year basis, Supermicro's Q4 revenue increased by only 7.5%, a far slower pace than in prior quarters. Even worse, the company's adjusted EPS fell by 24% year over year, a wider-than-expected decline.
CEO Charles Liang may have blamed the revenue miss on delayed revenue recognition and the earnings miss on recent tariff hikes. Still, I believe the market took these disappointing results as a sign that the competition continues to get the better of Supermicro.
Alongside disappointing quarterly results, the company also released disappointing updates to guidance. Full-year revenue guidance of $33 billion, or 50% above reported FY2025 revenue, may sound impressive, but previously, the company was guiding for $40 billion in revenue for the fiscal year ending June 30, 2026.
Furthermore, with Q1 FY2026 guidance calling for between $6 billion and $7 billion in revenue, it's questionable whether Supermicro can even hit its walked-back revenue target for the full year.
While the company's quarterly results fell short, its annual revenue came in ahead of expectations, growing by 47% over the prior fiscal year. Still, given the latest slowdown and decline in revenue and profitability, I'm skeptical that a rebound is just a few quarters away.
Supermicro's growth, profitability, and stock price remain under threat
Trading for around 25 times annual earnings, Supermicro trades at a premium to direct competitors like Dell Technologies (NYSE: DELL) and Hewlett Packard Enterprise (NYSE: HPE). Dell and HPE both currently trade for 20 times earnings.
In the past, Supermicro's valuation premium made sense. After all, this company was an early mover, capitalizing on its strong ties with Nvidia (NASDAQ: NVDA) to quickly bring out cutting-edge AI server products. However, since then, competitors have gained a greater edge.
In turn, this has led to a sharp decline in market share, a trend that is one of three reasons why I'm cautious about Supermicro stock right now. Between 2022 and 2024, the company's share of the AI server market fell from at least 80% to between 40% and 50%.
Further declines may lie ahead. Last month, analysts at Bank of America (BofA) argued that rivals Dell and HPE are better positioned to win new business from enterprise clients. This makes sense, given their existing relationships with such clients.
Additional market share losses could result in a further slowdown in sales growth, but that's not all. High competition could also place further pressure on margins, the second reason I'm concerned about this stock. In recent years, Supermicro's gross margins have shrunk from 18% to 9.5%.
An additional squeeze is possible. Back in June, analysts at KeyBanc argued that a lack of product differentiation points to Supermicro having to compete on price to sustain higher growth. The impact of this on margins could counter the positive impact of a sales resurgence.
To top it all off, there's another long-standing risk with Supermicro that also makes me concerned about future performance: the risk of losing major customers. Reportedly, key customers like CoreWeave and X.ai have started placing AI server orders with Dell. If these customers fully switch over to a competitor for their AI server needs, this could materially affect Supermicro's future revenue and earnings.
Bottom line: I'm sticking to the sidelines
If the aforementioned issues lead to an additional growth slowdown and/or drop in profitability, the impact on the price of Supermicro shares could be significant.
Over the past 12 months, this stock has traded for as low as $17.25 per share. Supermicro could retrace this past low if quarterly results continue to disappoint, management keeps walking back expectations, and SMCI's valuation premium to Dell and HPE continues to erode.
Given these risks, I'm waiting things out -- at least until subsequent developments emerge that help to assuage my concerns.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

3 Reasons Why I Wouldn't Buy the Dip on Super Micro Computer Stock Yet

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Darling Ingredients Inc (Symbol: DAR), where a total volume of 10,564 contracts has been traded thus far today, a contract volume which is representative of approximately 1.1 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 49.1% of DAR's average daily trading volume over the past month, of 2.2 million shares. Especially high volume was seen for the $37.50 strike call option expiring September 19, 2025, with 4,150 contracts trading so far today, representing approximately 415,000 underlying shares of DAR. Below is a chart showing DAR's trailing twelve month trading history, with the $37.50 strike highlighted in orange:
Super Micro Computer Inc (Symbol: SMCI) options are showing a volume of 205,349 contracts thus far today. That number of contracts represents approximately 20.5 million underlying shares, working out to a sizeable 48.2% of SMCI's average daily trading volume over the past month, of 42.6 million shares. Particularly high volume was seen for the $45 strike call option expiring August 29, 2025, with 18,558 contracts trading so far today, representing approximately 1.9 million underlying shares of SMCI. Below is a chart showing SMCI's trailing twelve month trading history, with the $45 strike highlighted in orange:
And Occidental Petroleum Corp (Symbol: OXY) saw options trading volume of 47,418 contracts, representing approximately 4.7 million underlying shares or approximately 48.1% of OXY's average daily trading volume over the past month, of 9.9 million shares. Especially high volume was seen for the $38 strike put option expiring September 19, 2025, with 8,504 contracts trading so far today, representing approximately 850,400 underlying shares of OXY. Below is a chart showing OXY's trailing twelve month trading history, with the $38 strike highlighted in orange:
For the various different available expirations for DAR options, SMCI options, or OXY options, visit StockOptionsChannel.com.
BMAC shares outstanding history
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Notable Thursday Option Activity: DAR, SMCI, OXY

Super Micro Computer SMCI stock has lost 25.6% following its lower-than-expected fourth-quarter fiscal 2025 earnings. Super Micro Computer reported fourth-quarter fiscal 2025 non-GAAP earnings of 41 cents per share, which missed the Zacks Consensus Estimate by 6.8%.
Super Micro Computer, Inc. Price and Consensus
SMCI stock has also been highly volatile in the past year. However, the recent decline in the stock price has made it undervalued compared to the Zacks Computer- Storage Devices industry. At present, SMCI stock trades at a forward 12 months P/E ratio of 19.2X, which is lower than the 25.08X of the Zacks Computer- Storage Devices industry’s ratio of 18.59X.
SMCI Forward 12 Month (P/E) Valuation Chart
Image Source: Zacks Investment Research
SMCI Faces Growing Competition
Rising competition from the leading companies in the storage and server space, such as Pure Storage PSTG, Dell Technologies DELL and Hewlett Packard Enterprise HPE, is a concern for investors.
In the storage space, Pure Storage offers a range of modern storage solutions through its offerings like FlashArray, FlashBlade and Pure Cloud Block Store to serve the purpose of providing All-Flash performance, cloud integration, AI and simplified management.
In the AI-optimized server space, Dell Technologies is a strong competitor. In the first quarter of fiscal 2026, DELL announced that it had received orders worth $12.1 billion for its AI servers, which has surmounted to become $14.4 billion in AI backlogs.
Hewlett Packard Enterprise also offers a range of server services, including HPE ProLiant, HPE Synergy, HPE BladeSystem and HPE Moonshot servers. In the second quarter of fiscal 2025, Hewlett Packard Enterprise’s server segment sales grew 6% year over year due to strong demand for its AI servers.
Margin Compression Hurts SMCI
SMCI is facing margin contraction due to the growing price competition from established competitors. Furthermore, price adjustments from its clients as they are second-guessing their shift from older to newer platforms like Blackwell are also weighing on SMCI’s margins.
Delayed purchasing decisions from customers as they are evaluating the adoption of next-generation AI platforms are also hurting SMCI in the near term. SMCI’s gross margin has been moving inconsistently for the past several quarters, with a declining trend. In the fourth quarter of fiscal 2025, SMCI’s non-GAAP gross margin contracted 70 basis points year over year.
Moreover, Super Micro Computer’s margins are facing pressure from high inventory reserves for older-generation products. Competitive pricing strategy to boost its DLC AI GPU cluster adoption has shot up the costs, resulting in margin contraction.
Additionally, higher upfront costs associated with ramping up production for its DLC technology are weighing on Super Micro Computer’s gross margin. The Zacks Consensus Estimates for the company’s first-quarter fiscal 2026 earnings is pegged at 47 cents, indicating a year-over-year decline of 37.3%. However, not everything is gloom and doom for SMCI.
Image Source: Zacks Investment Research
SMCI’s Long-Term Prospects Look Bright
Despite its recent troubles, Super Micro Computer’s long-term growth prospects remain intact. The company has been a leader in providing high-performance server solutions, particularly for data centers that support AI and other advanced technologies.
The global demand for AI-driven solutions continues to rise, and Super Micro Computer's role as a builder of data center infrastructure positions it well to benefit from this trend. Moreover, Super Micro Computer’s reputation for designing and delivering energy-efficient, high-performance server systems has not been entirely overshadowed by recent events.
The company’s expertise in integrating advanced graphics processing units from major tech players like Nvidia is a strategic advantage as enterprises scale their data centers to accommodate next-generation computing needs. This foundational strength suggests that Super Micro Computer is poised to bounce back once it resolves its current issues.
Conclusion: Hold SMCI Stock for Now
Although SMCI faces near-term challenges from growing competition, contracting margins and delayed orders due to macroeconomic headwinds, the company’s long-term prospects are bright. Its AI-driven solutions, DCBBS and direct liquid cooling offerings are in high demand from its customers.
Currently, SMCI carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

SMCI Plunges 25.6% Post Q4 Earnings: Should You Hold or Fold the Stock?

Vertiv VRT is a leading provider of thermal and power management solutions for data centers that consume immense amounts of power. The increasing complexity of AI hardware and edge computing further increases the demand for power.
The increasing demand for data centers has benefited Vertiv’s top-line growth. In the second quarter of 2025, net sales increased 35.1% year over year to $2.64 billion. Vertiv's backlog reached $8.5 billion, up 21% year over year.
VRT’s solutions continue to gain traction as reflected in order growth of roughly 15% year over year and 11% sequentially in the second quarter of 2025. This reflects AI and data center capacity expansion plans of its customers.
As the demand for efficient energy use in data centers is rising, VRT’s role has become increasingly vital, with innovation and strategic partnerships serving as key catalysts for driving the future of sustainable data center solutions.
Building on this momentum, Vertiv recently announced the global launch of Vertiv OneCore, a scalable prefabricated data center solution that integrates power, thermal, and IT infrastructure to accelerate high-density deployments while reducing on-site complexity and timelines.
Collaborations with CoreWeave and Oklo strengthened its technology leadership, positioning Vertiv well for long-term growth in the evolving data center market.
VRT Suffers From Stiff Competition
Vertiv’s AI infrastructure solutions face increasing competition from Super Micro Computer SMCI and Hewlett-Packard Enterprise HPE, both of which are expanding their capabilities to serve hyperscale and enterprise AI data center deployments.
Super Micro Computer is strengthening its position with end-to-end AI rack-scale systems that integrate compute, networking, storage, and liquid cooling. Hewlett-Packard is expanding its footprint through HPE Cray and ProLiant servers, bundled with liquid-cooled solutions and high-speed interconnects.
Both Super Micro Computer and Hewlett-Packard are strengthening their positions in the hyperscale and enterprise AI data center market, directly challenging Vertiv’s role as a key enabler of power, cooling, and infrastructure management.
Vertiv’s Share Price Performance, Valuation, and Estimates
VRT’s shares have gained 13.6% year to date. The broader Zacks Computer & Technology sector has appreciated 11.8%, while the Zacks Computers - IT Services industry has plunged 15.7% in the same period.
VRT Stock's Performance
Image Source: Zacks Investment Research
Vertiv stock is trading at a premium, with a trailing 12-month Price/Book of 15.77X compared with the Computer and Technology sector’s 9.75X. VRT has a Value Score of F.
VRT Valuation
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for third-quarter earnings is pegged at 99 cents per share, up by 3.1% over the past 30 days, indicating 30.26% year-over-year growth.
The consensus mark for 2025 earnings is pegged at $3.82 per share, up by 7% over the past 30 days. This indicates a 34.04% increase from the reported figure of 2024.
Vertiv Holdings Co. Price and Consensus
Vertiv currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
#1 Semiconductor Stock to Buy (Not NVDA)
The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.
One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Vertiv's Data Center Growth Fuels Revenue: A Sign for More Upside?

Investors considering a purchase of Super Micro Computer Inc (Symbol: SMCI) shares, but cautious about paying the going market price of $41.73/share, might benefit from considering selling puts among the alternative strategies at their disposal. One interesting put contract in particular, is the December 2027 put at the $23 strike, which has a bid at the time of this writing of $3.75. Collecting that bid as the premium represents a 16.3% return against the $23 commitment, or a 7% annualized rate of return (at Stock Options Channel we call this the YieldBoost).
Selling a put does not give an investor access to SMCI's upside potential the way owning shares would, because the put seller only ends up owning shares in the scenario where the contract is exercised. And the person on the other side of the contract would only benefit from exercising at the $23 strike if doing so produced a better outcome than selling at the going market price. (Do options carry counterparty risk? This and six other common options myths debunked). So unless Super Micro Computer Inc sees its shares decline 44.9% and the contract is exercised (resulting in a cost basis of $19.25 per share before broker commissions, subtracting the $3.75 from $23), the only upside to the put seller is from collecting that premium for the 7% annualized rate of return.
Below is a chart showing the trailing twelve month trading history for Super Micro Computer Inc, and highlighting in green where the $23 strike is located relative to that history:
The chart above, and the stock's historical volatility, can be a helpful guide in combination with fundamental analysis to judge whether selling the December 2027 put at the $23 strike for the 7% annualized rate of return represents good reward for the risks. We calculate the trailing twelve month volatility for Super Micro Computer Inc (considering the last 250 trading day closing values as well as today's price of $41.73) to be 113%. For other put options contract ideas at the various different available expirations, visit the SMCI Stock Options page of StockOptionsChannel.com.
In mid-afternoon trading on Wednesday, the put volume among S&P 500 components was 1.52M contracts, with call volume at 1.52M, for a put:call ratio of 0.72 so far for the day, which is above normal compared to the long-term median put:call ratio of .65. In other words, if we look at the number of call buyers and then use the long-term median to project the number of put buyers we'd expect to see, we're actually seeing more put buyers than expected out there in options trading so far today. Find out which 15 call and put options traders are talking about today.
Also see:
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BMEA shares outstanding history
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Commit To Purchase Super Micro Computer At $23, Earn 16.3% Using Options

Below is Validea's guru fundamental report for SUPER MICRO COMPUTER INC (SMCI). Of the 22 guru strategies we follow, SMCI rates highest using our P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.
SUPER MICRO COMPUTER INC (SMCI) is a large-cap growth stock in the Computer Hardware industry. The rating using this strategy is 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of SUPER MICRO COMPUTER INC
More Information on Peter Lynch
About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.
Additional Research Links
About Validea: Validea is aninvestment researchservice that follows the published strategies of investment legends. Validea offers both stock analysis and model portfolios based on gurus who have outperformed the market over the long-term, including Warren Buffett, Benjamin Graham, Peter Lynch and Martin Zweig. For more information about Validea, click here
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

SMCI Factor-Based Stock Analysis - Peter Lynch

The following are the top rated Information Technology stocks according to Validea's P/E/Growth Investor model based on the published strategy of Peter Lynch. This strategy looks for stocks trading at a reasonable price relative to earnings growth that also possess strong balance sheets.
QUALCOMM INC (QCOM) is a large-cap growth stock in the Communications Equipment industry. The rating according to our strategy based on Peter Lynch is 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Qualcomm Incorporated is engaged in the development and commercialization of foundational technologies for the wireless industry, including third generation (3G), fourth generation (4G) and fifth generation (5G) wireless connectivity, and high-performance and low-power computing, including on-device artificial intelligence. Its segments include Qualcomm CDMA Technologies (QCT), Qualcomm Technology Licensing (QTL) and Qualcomm Strategic Initiatives. QCT develops and supplies integrated circuits and system software based on 3G/4G/5G and other technologies, including radio frequency front-end, digital cockpit and advanced driver assistance and automated driving, Internet of things including consumer electronic devices, industrial devices and edge networking products. QTL grants licenses or otherwise provides rights to use portions of its intellectual property portfolio that includes certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of QUALCOMM INC
APPLIED MATERIALS INC (AMAT) is a large-cap growth stock in the Semiconductors industry. The rating according to our strategy based on Peter Lynch is 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Applied Materials, Inc. is a materials engineering solution company. The Company provides equipment, services and software to the semiconductor, display, and related industries. It operates in three segments: Semiconductor Systems, Applied Global Services (AGS), and Display. The Semiconductor systems segment designs, develops, manufactures and sells a range of primarily 300 mm equipment used to fabricate semiconductor chips, also referred to as integrated circuits (ICs). The AGS segment provides services, spares and factory automation software to customer fabrication plants globally. The AGS segment also manufactures and sells 200mm and other equipment. The Display segment is comprised primarily of products for manufacturing liquid crystal displays (LCDs), organic light-emitting diodes (OLEDs), and other display technologies for televisions, monitors, laptops, personal computers (PCs), tablets, smartphones, and other consumer-oriented devices.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of APPLIED MATERIALS INC
FORTINET INC (FTNT) is a large-cap growth stock in the Software & Programming industry. The rating according to our strategy based on Peter Lynch is 91% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Fortinet, Inc. is engaged in cybersecurity, driving the convergence of networking and security. The Companys integrated platform, Fortinet Security Fabric, spans secure networking, unified Secure Access Service Edge (SASE) and artificial intelligence (AI)-driven security operations (SecOps). Its products and services include FortiOS, FortiASIC, FortiCloud, FortiAI, FortiEndpoint, and OT Security. The FortiGuard Labs is a cybersecurity threat intelligence and research organization comprised of experienced threat hunters, researchers, analysts, engineers and data scientists who develop and utilize machine learning and AI technologies. FortiGuard and Other Security Services are a suite of AI-powered security capabilities that are integrated as part of the Fortinet Security Fabric to deliver coordinated detection and enforcement across the entire attack surface. FortiCare Technical Support Service is a per-device technical support service. It also operates Fortinet Training Institute.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of FORTINET INC
MONOLITHIC POWER SYSTEMS INC (MPWR) is a large-cap growth stock in the Semiconductors industry. The rating according to our strategy based on Peter Lynch is 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Monolithic Power Systems, Inc. is a fabless company, which provides semiconductor-based power electronic solutions. The Company design and develop its products for the enterprise data, storage and computing, automotive, communications, consumer, and industrial end markets. Direct Current (DC) to DC, Alternating Current (AC) to DC, driver metal-oxide-semiconductor field-effect transistor, power management integrated circuit (IC), current limit switch and lighting control products. Its DC to DC ICs are used to convert and control voltages within a range of electronic systems, such as cloud-based central processing unit (CPU) servers, server artificial intelligence (AI) applications, storage applications, commercial notebooks, digital cockpit, power sources, home appliances, fourth generation (4G) and fifth generation (5G) infrastructure and satellite communications applications. The Company have sales offices in various locations in Asia, Europe and the United States.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of MONOLITHIC POWER SYSTEMS INC
SUPER MICRO COMPUTER INC (SMCI) is a large-cap growth stock in the Computer Hardware industry. The rating according to our strategy based on Peter Lynch is 74% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
Company Description: Super Micro Computer, Inc. provides application-optimized Total IT solutions. It delivers rack-scale solutions optimized for various workloads, including artificial intelligence and high-performance computing, where acceleration is critical. It produces a portfolio of server and storage solutions for enterprise data centers, cloud service providers and edge computing (5G Telco, Retail and embedded). Total IT Solutions include complete servers, storage systems, modular blade servers, workstations, full-rack scale solutions, networking devices, server sub-systems, server management and security software. It provides global support and services to help its customers install, upgrade and maintain their computing infrastructure, including liquid-cooling operations. It offers platforms in rackmount, blade, multi-node and embedded form factors, which support single, dual and multiprocessor architectures. Its key product lines include SuperBlade and MicroBlade, SuperStorage, Twin and others.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of SUPER MICRO COMPUTER INC
About Peter Lynch: Perhaps the greatest mutual fund manager of all-time, Lynch guided Fidelity Investment's Magellan Fund to a 29.2 percent average annual return from 1977 until his retirement in 1990, almost doubling the S&P 500's 15.8 percent yearly return over that time. Lynch's common sense approach and quick wit made him one of the most quoted investors on Wall Street. ("Go for a business that any idiot can run -- because sooner or later, any idiot probably is going to run it," is one of his many pearls of wisdom.) Lynch's bestseller One Up on Wall Street is something of a "stocks for the everyman/everywoman", breaking his approach down into easy-to-understand concepts.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Validea's Top Information Technology Stocks Based On Peter Lynch - 8/18/2025

Guru Fundamental Report for SMCI - Peter Lynch

Key Points
Super Micro's narrowing gross profit margin has been negating the company's sales growth.
Low margins can be a sign of underlying problems.
The stock has fallen since its latest earnings report and appears modestly valued, based on its expected future earnings.
Shares of Super Micro Computer (NASDAQ: SMCI) plunged last week after the company reported its latest earnings numbers. The business, also known as Supermicro, has benefited from strong growth in tech by providing servers, storage systems, and other necessary infrastructure for companies that are investing in artificial intelligence (AI) and upgrading their computing capabilities.
In recent years, Supermicro has seen its sales explode due to the soaring demand it has experienced for its servers and AI infrastructure. And in just five years, this once-small stock with a market cap of about $1 billion in 2020, has grown to be worth nearly $30 billion today. At its peak, its valuation was nearly $70 billion.
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The company has been struggling of late, but the big problem isn't a new one. And its lack of earnings growth stems from one number that investors simply can't afford to ignore: its gross profit.
Gross profit declined last quarter
On Aug. 5, Supermicro reported its fiscal fourth-quarter numbers for the period ended June 30, and sales rose by 8% to $5.8 billion. The company's slowing growth is a problem, but a bigger one is that its gross profit declined, from $546 million to $544 million.
Gross profit is what a company has left from revenue after accounting for cost of sales. Although it wasn't a huge drop in gross profit this past quarter, this is not the type of trend you expect from a growth stock.
A decline in gross profit is concerning because it can mean a company is relying heavily on discounted prices to move products, perhaps due to intense competition or limited demand. Either way, it's not a great situation to be in.
And in Supermicro's case, its narrowing gross margin negated the revenue growth the company achieved in the latest quarter. If that trend continues, that means even if its sales take off, that may not necessarily lead to a big increase in the bottom line.
Supermicro is forecasting more growth in the year ahead
For the full fiscal year, net sales totaled $22 billion, up 47% year over year. For the current fiscal year, it is projecting net sales of $33 billion, implying a faster growth rate, at 50%.
That appears to be optimistic, given the uncertainty in the markets these days due to tariffs and rapidly changing macroeconomic conditions.
But even if that growth materializes, it may not necessarily result in positive earnings growth. Consider that while sales rose at a high rate in the past fiscal year, net income fell by 9%.
It all comes back to those thin gross profit margins. If the company's margins were wider than the 11% it has been averaging, there would have been more in gross profit to help cover its rising operating expenses. And that's why until its margins improve, the business may face an uphill battle in growing its earnings.
Investors should tread carefully with Supermicro
Supermicro does have a lot of long-term potential due to AI, but the tech stock is by no means a slam-dunk buy, even though it appears cheap, trading at a forward price-to-earnings multiple of only 16 (based on analyst estimates). Unless you have a high risk tolerance, I think you may be better off taking a wait-and-see approach with Supermicro.
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David Jagielski has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.