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.

SMCI’s strong business-scale growth is accompanied by noticeable pressure on margins and elevated leverage. Its valuation on P/E, P/S, and P/B looks cheap relative to the industry, which supports the investment case, but part of that cheapness already reflects risks related to earnings quality and result volatility. A P/E of 14.48 and P/S of 0.52 are significantly below the sector median, while a P/B of 1.86 also does not look expensive for a company with a high return on capital. At the same time, P/FCF is zero, which calls for caution: either free cash flow in the current period is distorted, or it is not stable enough to support a confident re-rating. Return on capital remains strong: ROE of 25.08%, ROA of 9.26%, and ROI of 15.31% are above industry benchmarks, indicating good operating leverage quality. However, gross margin of 10.82%, operating margin of 7.09%, and net margin of 5.68% are below the industry median, meaning the business generates a lot in absolute terms but with relatively thin margins. Margin dynamics have improved in recent periods compared with earlier values, but they remain vulnerable to price competition and changes in order mix. The liquidity profile looks comfortable: a current ratio of 3.87 and a quick ratio of 2.07 provide a cushion, while a cash position of $7.52 billion supports flexibility. At the same time, a debt/equity ratio of 0.46 and long-term debt of $6.68 billion indicate a noticeable debt burden, which increases risk for a cyclical and fast-growing business. Revenue, gross profit, EBITDA, and net income are at high levels and generally growing, confirming the company’s scaling. Equity has also increased significantly, which partially offsets debt risk and supports financial stability. There are no dividends, so shareholder returns depend entirely on business growth and multiple expansion. Overall, the fundamentals remain strong, but not risk-free: cheap valuation and high return on capital support upside potential, while weak margins and debt limit aggressive upside. For a conservative investor, this is more an argument for a moderately positive revision than for a sharp increase in the target valuation.

Super Micro Computer, Inc.

Сильный индекс, значительно вырос. Быки резко укрепили уверенность в своих позициях.

Strong index, significantly up. Bulls sharply strengthened confidence in their positions.

Средний индекс, незначительно вырос. Рынок на стороне быков.

Medium index, slightly up. The market is on the bulls' side.

Сильный индекс, значительно упал. Отток средств из лонгов увеличился и находится на высоком уровне.

Strong index, significantly down. The outflow of funds from longs has increased and is at a high level.

SMCI appears undervalued on valuation multiples and strong in ROE/ROA, but low margins, debt, and unstable FCF limit the re-rating potential.

In trading on Friday, computers shares were relative laggards, down on the day by about 3.2%. Helping drag down the group were shares of Quantum, down about 10.2% and shares of Super Micro Computer down about 7.3% on the day.
Also lagging the market Friday are application software shares, down on the day by about 2.9% as a group, led down by Bandwidth, trading lower by about 13% and Twilio, trading lower by about 10.2%.

Friday Sector Laggards: Computers, Application Software Stocks

Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in Bloom Energy Corp (Symbol: BE), where a total of 136,830 contracts have traded so far, representing approximately 13.7 million underlying shares. That amounts to about 76.3% of BE's average daily trading volume over the past month of 17.9 million shares. Especially high volume was seen for the $295 strike call option expiring October 02, 2026, with 10,049 contracts trading so far today, representing approximately 1.0 million underlying shares of BE. Below is a chart showing BE's trailing twelve month trading history, with the $295 strike highlighted in orange:
Super Micro Computer Inc (Symbol: SMCI) saw options trading volume of 272,642 contracts, representing approximately 27.3 million underlying shares or approximately 71.7% of SMCI's average daily trading volume over the past month, of 38.0 million shares. Particularly high volume was seen for the $43.50 strike call option expiring October 02, 2026, with 17,387 contracts trading so far today, representing approximately 1.7 million underlying shares of SMCI. Below is a chart showing SMCI's trailing twelve month trading history, with the $43.50 strike highlighted in orange:
And Occidental Petroleum Corp (Symbol: OXY) saw options trading volume of 64,475 contracts, representing approximately 6.4 million underlying shares or approximately 69.1% of OXY's average daily trading volume over the past month, of 9.3 million shares. Particularly high volume was seen for the $60 strike call option expiring October 09, 2026, with 13,766 contracts trading so far today, representing approximately 1.4 million underlying shares of OXY. Below is a chart showing OXY's trailing twelve month trading history, with the $60 strike highlighted in orange:
For the various different available expirations for BE options, SMCI options, or OXY options, visit StockOptionsChannel.com.
Further BE Research:

Notable Friday Option Activity: BE, SMCI, OXY

Key Points
Super Micro Computer was an early winner from the AI boom.
Investors seem to have moved past a DOJ investigation into the company.
While revenue growth is strong, margins at the company are narrow.
Super Micro Computer (NASDAQ: SMCI) isn't a household name in AI stocks the way, say, Nvidia is, but it's one of the fastest-growing companies in AI.
The server-maker, which is known for specialized, liquid-cooled systems optimized for artificial intelligence, reported 93% revenue growth in its most recent quarter, and 78% revenue growth for fiscal 2026, which ended on June 30.
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Supermicro, as the company is often known, was an early winner in the AI boom. The stock jumped more than 1,000% in less than a year before peaking in March 2024. The stock gained interest from its rapid growth and its close partnership with Nvidia, but then started falling on concerns about its valuation and due to a follow-on offering of 2 million shares. The sell-off accelerated in April after a whistleblower accused the company of improper revenue practices.
After a tumultuous period, Supermicro now seems to have stabilized. Is the stock a buy? Let's take a closer look at both sides of the argument.
Super Micro Computer: Bull vs. bear
The bull case for Supermicro seems fairly straightforward. The company is riding the AI boom, and seems to be in a good position to continue doing so as long as AI compute demand remains strong.
Additionally, the stock is cheap, trading at a price-to-earnings ratio of just 13, which seems to reflect doubt about the durability of its growth rate. The analyst consensus calls for revenue to grow 72% in fiscal 2027, but then slow to just 17% the following year. Supermicro has also differentiated itself in the server market in some ways. It benefits from getting early access to Nvidia chips, and it has its proprietary modular, customizable Building Block Solutions architecture. It's also known for advanced technologies like liquid cooling and rack-scale integration, which are valuable for serving data centers.
While its revenue growth and valuation are attractive, the company operates with narrow margins that indicate a lack of a competitive advantage. In fiscal 2026, its gross margin was just 10.8%. The company is essentially buying GPUs and repackaging them into servers, despite its differentiated qualities above.
Additionally, a DOJ probe that began in late 2024 culminated in charging insiders earlier this year in a $2.5 billion illegal smuggling scheme to route AI servers to China. Investors seem to have moved past this as the stock has traded mostly sideways since the news broke in 2024, and the company was not named as a defendant. Still, one episode of malfeasance raises the risk of another.
Is Supermicro a buy?
Given its valuation and revenue growth, there may be some short-term upside to Supermicro, but I think there are better AI stocks available, including Nvidia, which is growing just as fast and trades at a reasonable valuation.
Ultimately, Supermicro doesn't seem to have a significant competitive advantage and is beholden to growth in AI. Meanwhile, the DOJ case against the company casts a cloud over it and at least partly explains why the stock is cheap. There are better options in the AI sector.
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Is Super Micro Computer a Buy?

Super Micro Computer SMCI is one of the few AI infrastructure companies that enable AI data centers, AI Fabs, hyperscalers and enterprises for rapid adoption of new processor and accelerator platforms. Super Micro Computer is shipping volume systems based on NVIDIA’s GB300 NVL72, HGX B300, B200 NVL4 and RTX 6000 Pro platforms while preparing Vera Rubin systems. With AMD, it launched the Helios product line and MI450 Total Solution, alongside MI350 and MI355X systems.
AI and IT infrastructure business remains the primary driver of SMCI’s growth trajectory. SMCI’s fiscal 2026 revenues increased 78% year over year to $39.1 billion, while the company received more than $60 billion in new orders during the fourth quarter, taking its backlog to record levels entering fiscal 2027. SMCI expects the stronger order book to support continued expansion as customers accelerate AI infrastructure deployments.
SMCI’s AI solutions represented approximately 60% of fourth-quarter fiscal 2026 revenues. Enterprise and channel revenues also strengthened significantly, reaching $5.6 billion or 50% of quarterly sales, as customers upgraded computing, storage and networking infrastructure. SMCI expects AI-related solutions to account for more than 80% of revenues based on the current backlog.
To support demand, Supermicro is expanding manufacturing capacity across the United States, Taiwan, Malaysia and the Netherlands. Its manufacturing capability is expected to exceed 6,000 racks per month, including more than 3,000 direct-liquid-cooled racks, with support for high-density 250-kilowatt platforms. For fiscal 2027, management expects revenues between $65 billion and $72 billion, while first-quarter revenues are projected to be in the range of $14.5-$15.5 billion.
How Competitors Fare Against SMCI
SMCI is at a crossroads with major players like Hewlett Packard Enterprise HPE and Dell Technologies DELL. Hewlett Packard Enterprise is providing enterprises with an integrated AI infrastructure portfolio spanning hardware, software and cloud management to scale generative AI, agentic AI and high-performance computing workloads.
HPE combines compute, storage, networking and the GreenLake platform with NVIDIA's GPUs, CPUs, networking technologies and AI Enterprise software. The integrated offering allows enterprises to build and manage AI environments through a unified platform.
Dell Technologies, meanwhile, is pursuing a broader ecosystem strategy through its Dell AI Factory. Rather than focusing solely on servers, Dell is expanding across compute, storage, networking, automation and software. Dell recently introduced PowerEdge R9822 and M9822 servers.
SMCI’s Price Performance, Valuation and Estimates
Shares of Super Micro Computer have gained 41.5% year to date compared with the Zacks Computer – Storage Devices industry’s growth of 248.2%.
SMCI YTD Performance Chart
From a valuation standpoint, SMCI is trading at a discount at a forward 12 Month P/S multiple of 0.37X compared with the industry’s P/S multiple of 3.22X.
SMCI Forward 12-Month (P/S) Valuation Chart
The Zacks Consensus Estimate for Super Micro Computer’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 22% and 19%, respectively. Estimates for fiscal 2026 and 2027 earnings have been revised upward in the past 60 days.
Super Micro Computer currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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This article originally published on Zacks Investment Research (zacks.com).

Can SMCI's Record Backlog Sustain Revenue Momentum in FY27?

Dell Technologies DELL is benefiting from rapidly broadening demand for its Artificial Intelligence (AI) infrastructure among Neoclouds, sovereign customers and enterprises. In the second quarter of fiscal 2027, the company said it had more than 6,500 customers buying DELL AI Factory, with 3,300 added over the past three quarters. This expanding customer base highlights growing adoption across multiple client groups and supports the company’s focus on the AI infrastructure market amid growing competition from Super Micro Computer SMCI and Cisco Systems CSCO.
DELL is maintaining momentum among sovereign and large Neocloud customers, diversifying its AI exposure across multiple customer groups. The company noted that enterprise AI customers tend to purchase more storage and networking products alongside servers. DELL’s engineering, deployment and global supply-chain capabilities further support this opportunity, with some AI engagements requiring more than 50 unique designs to optimize performance, power, cooling and data-center requirements. On-premises and edge AI deployments represent another avenue for customer expansion. The company believes these environments can offer attractive token economics for suitable workloads while giving enterprises greater control over data and intellectual property.
AI adoption is creating demand across traditional servers, networking and storage as customers modernize infrastructure to support increasingly distributed workloads. Strong customer expansion is translating into substantial demand visibility. DELL booked a record $60.9 billion in AI-server orders and generated $16.4 billion in AI-server revenues in the second quarter of fiscal 2027, exiting with a $95 billion backlog. The company’s pipeline remained multiple times the backlog even after converting $131.7 billion into orders over the previous 12 months. DELL expects fiscal 2027 AI-server revenues of $74 billion, roughly three times the prior-year level.
DELL anticipates enterprise agentic AI becoming the dominant workload by 2028, with AI expected to drive 75% of data-center demand by 2030. The company estimates that about half of this opportunity falls within its core Neocloud, sovereign and enterprise customer base, implying an addressable opportunity of more than $1 trillion. DELL Financial Services could also support adoption by helping customers bridge the period between ordering infrastructure and generating their first AI tokens.
DELL Faces Tough Competition
Super Micro Computer is broadening its AI customer base across Neoclouds, cloud service providers and enterprises. In fiscal 2026, nine customers generated more than $1 billion each, up from four a year earlier. Enterprise and channel revenues reached $5.6 billion in the fourth quarter of fiscal 2026, rising 172% year over year. SMCI is also expanding its enterprise sales force and Data Center Building Block Solutions platform across compute, storage, networking, liquid cooling, software and services. The company entered fiscal 2027 with more than $60 billion in new orders and is targeting manufacturing capacity of more than 6,000 racks per month, including more than 3,000 direct-liquid-cooled racks.
CSCO is also widening its AI customer reach. In the fourth quarter of fiscal 2026, enterprise product orders rose 21% year over year, while public-sector orders increased 30% and service-provider and cloud orders jumped 95%. CSCO generated $9.3 billion in hyperscaler AI infrastructure orders in fiscal 2026 and more than $1 billion from Neocloud, sovereign and enterprise customers. Enterprise Nexus switch orders tied to AI deployments also increased by more than 85% sequentially, intensifying competition with DELL.
DELL’s Share Price Performance, Valuation & Estimates
Shares of DELL have appreciated 351.2% year to date, outperforming the broader Zacks Computer and Technology sector’s 19.8% growth.
DELL Stock’s Price Performance
DELL stock is trading at a discount, with a forward 12-month price/earnings ratio of 20.31 compared with the broader sector’s 20.85. DELL has a Value Score of D.
DELL’s Valuation
The Zacks Consensus Estimate for DELL earnings is currently pegged at $6.64 per share, up by $2.12 over the past 30 days, suggesting 156.37% growth.
Dell Technologies Inc. Price and Consensus
DELL currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
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DELL Rides on Growing AI Clientele: Can the Stock Outpace SMCI & CSCO?

AI infrastructure stocks are flourishing on Wall Street with more vigor. In order to support aggressive workloads, AI-driven data centers are aggressively demanding high-density rack space and direct-to-chip liquid cooling. An astonishing rise in demand for high-performance rack servers boosted stock prices of companies in this space.
Here, we have narrowed our search to three AI-server manufacturers with a top Zacks Rank for Investment. Their robust business model, industry-leading product portfolio and guidance will ensure the northward journey of these stock prices in 2027 and beyond.
The companies are: Dell Technologies Inc. DELL, Super Micro Computer Inc. SMCI and Hewlett Packard Enterprise Co. HPE. Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Dell Technologies Inc.
Dell Technologies reported blockbuster results for the second quarter of fiscal 2027. Revenues surged 53% and EPS skyrocketed 203% year over year in the reported quarter. Infrastructure Solutions Group revenue jumped 89% to $31.8 billion, led by a 100% increase in AI-optimized server revenue to $16.4 billion and a 122% surge in traditional server and networking sales to $10.5 billion.
AI Servers and Core Infrastructure Strength
In the second quarter of fiscal 2027, DELL booked a record $60.9 billion of AI orders and recognized $16.4 billion of AI server revenues. Orders totaled $131.7 billion over the past 12 months, while backlog rose to $95 billion from $51.3 billion at the end of first-quarter fiscal 2027. DELL expects roughly $19 billion of AI server revenues in third-quarter fiscal 2027.
On May 27, the Pentagon announced a five-year contract with Dell worth $9.7 billion for Microsoft 365 productivity services. As a result, management is hopeful that its fiscal 2027 AI server sales will reach $60 billion.
Integrated AI Portfolio
DELL’s expanding AI infrastructure stack supports customers that want compute, networking, storage and data management on infrastructure they control. DELL’s ecosystem includes NVIDIA Corp. NVDA, Advanced Micro Devices Inc. AMD, OpenAI, Meta Platforms Inc. META, Palantir Technologies Inc. PLTR, Mistral AI, Alphabet Inc. GOOGL, Reflection, Hugging Face and Glean.
Solid Estimate Revisions
Dell Technologies has an expected revenue and earnings growth rate of 72.6% and more than 100%, respectively, for the current year (ending January 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 32.3% over the last 30 days.
DELL has an expected revenue and earnings growth rate of 18.1% and 16.3%, respectively, for the next year. The Zacks Consensus Estimate for the next year’s earnings has improved 26.1% over the last 30 days.
Image Source: Zacks Investment Research
Strong Guidance
For the third quarter of fiscal 2027, Dell Technologies expects revenues of $49 billion, +/- $500 million, and non-GAAP earnings of $6.50 per share, +/- $0.10. DELL expects ISG revenues to grow roughly 145%, supported by about $19 billion in AI server revenues, while CSG revenues are expected to rise roughly 15%.
For fiscal 2027, management raised its revenue outlook by $25 billion to $192 billion, +/- $2 billion, and lifted non-GAAP earnings guidance to $25.50 per share, +/- $0.25. AI server revenues are now expected to reach $74 billion, or roughly three times the prior-year level, with traditional server growth forecast at just over 100%.
Attractive Valuation
Despite a year-to-date rally of more than 350%, the DELL stock still looks reasonably valued. It trades at a forward 12-month price-to-earnings (P/E) multiple of 22.42X compared with the industry average of 22.42X and the S&P 500 average of 17.89X. It trades at a price/sales (P/S) multiple of 2.39X compared with the industry average of 2.39X and the S&P 500 average of 2.92X.
Image Source: Zacks Investment Research
Super Micro Computer Inc.
Super Micro Computer’s fiscal 2026 revenues nearly doubled to $39.1 billion, while the company generated more than $60 billion in new orders during the fourth quarter, taking the backlog to record levels entering fiscal 2027.
The AI solutions represented about 60% of SMCI’s fourth-quarter fiscal 2026 revenues because several large projects shifted timing, but SMCI expects AI-related solutions to exceed 80% of revenues going forward based on backlog.
Transformation Toward a Complete AI Infra Provider
Super Micro Computer is moving beyond stand-alone servers toward complete Data Center Building Block Solutions. This strategy integrates GPU and CPU servers, enterprise storage, direct liquid cooling, power infrastructure, high-speed switches, networking, data-center management software and lifecycle services. SMCI said the model is intended to reduce customer time-to-deployment and time-to-online by providing a more integrated data-center build.
Robust Clientele of SMCI
Some of the largest customers of SMCI include NVIDIA, Intel Corp. INTC and Advanced Micro Devices. The company is a big beneficiary of the booming AI-empowered hardware market.
Solid Estimate Revisions
Super Micro Computer has an expected revenue and earnings growth rate of 71.8% and 22%, respectively, for the current year (ending June 2027). The Zacks Consensus Estimate for the current year’s earnings has improved 43.3% over the last 60 days.
SMCI has an expected revenue and earnings growth rate of 19.6% and 18.7%, respectively, for the next year. The Zacks Consensus Estimate for next year’s earnings has improved 42.2% over the last 60 days.
Image Source: Zacks Investment Research
Strong Guidance
For the first quarter of fiscal 2027, Super Micro Computer expects net sales of $14.5-$15.5 billion, with non-GAAP adjusted earnings of $1.01-$1.10 per share. SMCI expects first-quarter fiscal 2027 non-GAAP gross margin to be between 10.4% and 10.8%.
For full-year fiscal 2027, SMCI expects net sales of $65-$72 billion compared with $39.1 billion in fiscal 2026. The outlook reflects continued AI infrastructure demand, record backlog and increasing contributions from enterprise, sovereign AI, NeoCloud and agentic AI opportunities.
Attractive Valuation
Super Micro Computer is currently trading at an attractive valuation compared to its peers. The stock has a forward price/earnings (P/E) of 8.82X, compared with the industry’s P/E of 10.67X and the S&P 500’s P/E of 17.89X. It has a price/sale (P/S) of 0.66X, compared with the industry’s P/S of 5.43X and the S&P 500’s P/S of 2.92X. SMCI has a price/book (P/B) of 2.29X, significantly lower than the industry’s P/B of 16.86X and the S&P 500’s P/B of 3.56X.
Image Source: Zacks Investment Research
Hewlett Packard Enterprise Co.
Hewlett Packard Enterprise is benefiting from a broader shift toward AI infrastructure, networking modernization and hybrid cloud. In the third quarter of fiscal 2026, Cloud & AI revenues reached $9.0 billion, up 25% year over year, with a 17% operating margin.
Server revenues rose 35%, while traditional server orders increased 75% as customers favored AI-ready configurations and higher-value systems. Record orders and backlog show demand is running ahead of shipments.
Enterprise AI Offerings Support Larger Solution Wins
Hewlett Packard Enterprise is packaging compute, storage, networking and cloud management into AI systems and Private Cloud AI solutions for inferencing and agentic workloads. In the third quarter of fiscal 2026, AI systems orders were $2.4 billion, up more than 30% sequentially, while AI systems backlog rose 14% sequentially to $6.8 billion.
Private Cloud AI orders increased triple digits year over year, showing wider adoption of HPE’s on-premises AI factory approach. After quarter-end, HPE was awarded a $3.5 billion inferencing deal with a hyperscaler customer, adding evidence that enterprise AI deployments are moving beyond pilots.
Solid Estimate Revisions
Hewlett Packard Enterprise has an expected revenue and earnings growth rate of 17.4% and 19.9%, respectively, for next year (ending October 2027). The Zacks Consensus Estimate for next year’s earnings has improved 11.8% over the last 30 days.
Image Source: Zacks Investment Research
Strong Guidance
For the fourth quarter of fiscal 2026, HPE expects revenues of $13.9-$14.8 billion and non-GAAP earnings of $1.20-$1.30 per share. Networking revenues are projected to grow 11-13%, while Cloud & AI revenues are expected to increase 60-72%. For fiscal 2026, HPE raised its revenue growth outlook to 34-37% and non-GAAP earnings-per-share guidance to $3.75-$3.85. Free cash flow is now expected to be at least $3.75 billion.
For fiscal 2027, management raised its revenue growth framework to 13-17% and projected non-GAAP earnings-per-share growth of 16-20%. HPE expects a 14-15% non-GAAP operating margin and free cash flow of at least $5 billion, with Networking revenue growth of 14-17% and Cloud & AI growth of 14-18%.
Attractive Valuation
Hewlett Packard Enterprise is currently trading at an attractive valuation compared to its peers. The stock has a forward price/earnings (P/E) of 15.96X compared with the industry’s P/E of 21.21X and the S&P 500’s P/E of 17.89X. It has a price/sale (P/S) of 1.93X compared with the industry’s P/S of 7.79X and the S&P 500’s P/S of 2.92X. HPE has a price/book (P/B) of 3.03X, significantly lower than the industry’s P/B of 6.26X and the S&P 500’s P/B of 3.56X.
Image Source: Zacks Investment Research
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Buy Top-Ranked DELL, SMCI & HPE to Form a Powerful AI-Server Portfolio

Key Points
Qualcomm is expanding from mobile chips into AI PCs and hyperscale data centers.
Marvell benefits from long-term spending on AI networking and data center capacity.
Supermicro is selling the hardware needed to turn massive AI investments into working systems.
The Federal Reserve just pulled off its first rate hike since 2023, nudging its benchmark rate up to a 3.75% to 4% target range at the Sept. 15–16 meeting.
The next decision comes at the Oct. 27–28 gathering, and investors now have a few weeks to position for whatever tone Chair Kevin Warsh strikes on inflation and growth. If the Fed leans tougher again, durable growth stories tied to long-lived spending plans become more valuable.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Artificial intelligence fits that description, and three AI infrastructure names stand out as buys before that next decision.
1. Qualcomm
Qualcomm Technologies (NASDAQ: QCOM) has spent most of its existence as a mobile chip company, but recent moves show a business trying to own more of the AI stack. In early September, Qualcomm announced a multi‑generational product collaboration with Amazon to build custom AI chips and optical connectivity for Amazon Web Services data centers.
According to Reuters, the deal allows Amazon to purchase up to $60 billion of Qualcomm AI data center products over time and includes warrants that vest as those purchases accumulate, which turns future chip shipments into a financial tie between the two companies.
Qualcomm is already a major player in the new generation of AI-powered PCs. Its Snapdragon X Series chips power many of the first Copilot+ PCs. That gives the company a foothold in both the device a person uses every day and the cloud infrastructure that runs the models behind the scenes.
I like how Qualcomm spreads its revenue opportunities across consumer devices and contracts instead of relying on one thing. As the Fed debates another hike, owning a chipmaker that just landed a long‑term hyperscaler partnership and sits inside a new PC category is one way to lean into AI spending that is less sensitive to a single quarter of economic data.
2. Marvell
Marvell Technology (NASDAQ: MRVL) has become one of the key suppliers of the "plumbing" inside AI data centers. Earlier this year, Marvell rolled out what it calls the industry's first 102.4 terabit-per-second switch, purpose‑built for AI and cloud data center infrastructure, aimed at linking large clusters of accelerators with lower power and latency. In simple terms, Marvell made a super-fast computer traffic controller that helps thousands of AI chips communicate with each other faster while using less electricity.
At conferences this month, management was explicit that AI networking, optical connectivity, and custom XPU silicon are driving a higher revenue trajectory over the next few years. That matters with the Fed. When the Fed raises rates, projects that can be delayed usually get pushed out first. Re‑plumbing the data center to handle ever larger AI workloads is not easy to delay, so it should lock up some funding and work for Marvell.
For investors looking ahead to the October Fed meeting, Marvell offers exposure to AI infrastructure that is more about long‑term capacity planning than about discretionary consumer demand.
3. Supermicro
Super Micro Computer (NASDAQ: SMCI) sits one level higher than Marvell. It designs and sells complete server and storage systems optimized for AI, high‑performance computing and cloud workloads. The company is building powerful computer systems with AMD chips that can handle lots of AI work at once.
The company says it already has about $60 billion in AI orders, per Reuters, so its growth depends more on customers building huge AI data centers than on one small Fed rate change. There are still challenges like competition, cooling, and supply problems, but Supermicro is already selling the equipment needed to build these AI systems today. Sentiment here is similar to mine with Marvell: there is just too much money and workload waiting for this company for any Fed rate to hurt its stock.
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3 AI Stocks to Buy Before the Next Fed Rate Decision

Key Points
Aehr Test Systems provides specialized wafer-level testing solutions for the silicon carbide and AI markets.
Super Micro Computer leads the market for rack-scale IT infrastructure with massive AI-driven revenue growth.
Which of these specialized tech players is the better fit for your portfolio?
The race to power artificial intelligence creates opportunities for both hardware giants and niche companies. Choosing between Aehr Test Systems (NASDAQ:AEHR) and Super Micro Computer (NASDAQ:SMCI) depends on your specific risk tolerance.
Aehr provides the testing equipment necessary to ensure semiconductor quality, while Super Micro builds the high-performance server racks that house those chips. Both are central to the global computing shift, but they operate at very different scales. We look at their recent performance and financial health to see which might be the better buy today.
The case for Aehr Test Systems
Aehr Test Systems designs test and burn-in solutions for semiconductor devices used in electric vehicles, artificial intelligence, and telecommunications. Its systems ensure reliability by testing chips in wafer or singulated die form before final assembly. Five customers accounted for 70% of net sales in its 2026 fiscal year (FY), ended May 29, according to its latest annual report, and customer concentration like this adds a layer of risk to the business.
In FY 2026, revenue reached $50.0 million, representing a revenue decline of 15.2% compared to the prior year. The company recorded a net loss of $7.1 million during this fiscal period, following a previous period of much higher profitability. Its net margin for the year was -14.3%, which measures the percentage of total sales that remains as profit.
As of its May 2026 balance sheet, the current ratio is 10.3x, while the debt-to-equity ratio is zero. A current ratio over 1.0 suggests the company has more than enough short-term assets to cover its immediate bills. Free cash flow was negative $5.4 million, indicating the company is utilizing its cash reserves to maintain operations and development without relying on outside lenders.
The case for Super Micro Computer
Super Micro Computer serves a diverse set of market verticals including enterprise data centers, cloud computing, and edge computing. It is an increasingly vital player among semiconductor stocks because its rack-scale IT solutions facilitate the deployment of advanced artificial intelligence chips. Four customers each accounted for 10% or more of net sales in fiscal 2025 according to its latest annual report, and customer concentration like this adds a layer of risk to the business.
In FY 2026, ended June 30, revenue reached $39.1 billion, representing significant revenue growth of 77.8%. Net income reached $2.2 billion for the same period, showing substantial growth even as the net margin fluctuates. The net margin for the year was 5.7%, which measures how much of each revenue dollar translates into profit for shareholders.
As of its June 2026 balance sheet, the current ratio is 3.9x, meaning the company possesses significantly more current assets than current liabilities. The debt-to-equity ratio is 0.6x, showing the company uses a moderate amount of debt compared to its equity. Free cash flow was negative $7 billion, which suggests the company is investing heavily in inventory and manufacturing capacity to support its rapid growth.
Risk profile comparison
Aehr faces intense competition from larger systems manufacturers with greater financial resources. Its primary risk is revenue concentration, as losing one major customer would have a material adverse effect on operating results. The company also faces geopolitical risks regarding trade relations with China and Taiwan which could disrupt its supply chain.
Super Micro faces significant legal and regulatory risks, including class action lawsuits over potential accounting and export control issues. It competes with major technology vendors and remains sensitive to the price of components from Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC). Complex international trade regulations and evolving geopolitical tensions further complicate its global growth strategy.
Valuation comparison
Super Micro currently trades at a significantly lower Forward P/E based on future earnings estimates and a lower P/S ratio than Aehr.
Metric
Aehr Test Systems
Super Micro Computer
Forward P/E
117.7x
9.9x
P/S ratio
55.5x
0.6x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
Aehr Test Systems and Super Micro Computer provide different offerings to the artificial intelligence sector, with both delivering key services. Between the two, I I believe Super Micro is the better choice, which is why I invested in the company.
That said, Super Micro has been plagued by controversies recently. Last year, the company's stock was almost delisted for failing to file required earnings reports on time. This year, former employees were indicted in connection with an alleged conspiracy to commit export-control violations in an attempt to smuggle AI tech to China.
These incidents damaged Super Micro's reputation, but I believe the company and its stock can bounce back over time. Its sales are going strong, as demonstrated by the 78% year-over-year growth in FY 2026 sales. It's also a profitable business and shares are trading at a far lower valuation compared to Aehr Test Systems.
Aehr plays an important role in the AI ecosystem as a tester of semiconductor components. However, its sales have experienced volatile swings over the past several quarters, and its lack of profitability despite operating in the hot AI market is disappointing. These factors and Super Micro's strengths point to Super Micro as the better stock to own.
Should you buy stock in Aehr Test Systems right now?
Before you buy stock in Aehr Test Systems, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Aehr Test Systems wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $406,141!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,347,745!*
Now, it’s worth noting Stock Advisor’s total average return is 940% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
*Stock Advisor returns as of September 18, 2026.
Robert Izquierdo has positions in Intel, Nvidia, and Super Micro Computer. The Motley Fool has positions in and recommends Intel and Nvidia. The Motley Fool has a disclosure policy.

Better Artificial Intelligence Stock: Aehr Test Systems vs. Super Micro Computer

For Immediate Release
Chicago, IL – September 18, 2026 – Today, Zacks Investment Ideas features NVIDIA NVDA, Advanced Micro Devices AMD, Tempus AI TEM, Moderna MRNA, Super Micro Computer SMCI and Aya Gold & Silver Inc (AYA).
Will 2026 Doom and Gloom Lead to Opportunity?
2026 Has Been Full of Uncertainty
So far in 2026, Wall Street equity investors have navigated an extremely complex landscape marked by macroeconomic forces, geopolitical pressures, and sector-specific concerns. Inflation has remained stubborn, hovering above the Federal Reserve’s long-term target. Disruptions in key transit areas like the Strait of Hormuz have led to an energy shock, with oil prices jumping 75% in 2026 alone.
Recently appointed Fed Chair Kevin Warsh has been forced to tighten monetary policy. Artificial intelligence, the market’s fastest-growing area, has been faced with constant fear, uncertainty, and doubt about AI safety and CAPEX scrutiny. Meanwhile, the labor market is softening, and the upcoming midterm election adds another layer of legislative uncertainty.
The Power of Price Action vs. News Analysis
In my more than two decades of investing experience, I have learned that the stock market is the master manipulator. Most amateur investors focus too much on news headlines. However, analyzing news headlines alone is a sure-fire way to misinterpret the stock market. Rather than viewing news headlines in a vacuum, investors should focus on the market’s price action in relation to the news.
For instance, if listed all the 2026 uncertainties to someone who does not follow the equity market, they would most likely guess that stocks are in a major correction. The fact is that the stock market has had the proverbial kitchen sink thrown at it, and the S&P 500 Index is just 2% off its all-time highs. Remember, stocks tend to climb the “Wall of Worry.”
Retail Investor Sentiment Is in the Gutter
The American Association of Individual Investors (AAII) survey is a widely followed weekly poll that measures the percentage of individual retail investors who feel bullish, bearish, or neutral about the stock market over the next six months. Although the major equity indexes are within a hair of their highs, investor sentiment is extraordinarily negative. In fact, the latest AAII Survey shows the fewest bulls and most bears in over a year.
As George Patton once said, “If everyone is thinking alike, then somebody isn’t thinking.” Historical data backs up this claim. Since the late 1980s, when AAII bulls have fallen below 29% with the S&P 500 Index within 10% of all-time highs, stocks have been higher 100% of the time one month later (9 instances)
AI Safety Concerns Are Overblown
Recently, AI stocks corrected after OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei sounded the alarm on AI safety concerns and called for regulation. Despite the fear-mongering from AI leaders, it’s critical that investors read into what these CEOs are actually doing – not what they are saying. David Sacks, former “AI Czar” for the Trump Administration, made an astute observation:
“Dario (Anthropic CEO) has written that we need to “pace the frontier,” and Sam Altman (OpenAI CEO) has agreed. People may be surprised by my response: go ahead. You guys are the frontier. By any reasonable metric – market share, revenue growth, model capability – the two of you have a duopoly on frontier intelligence.”
Despite the alarmism, the top two AI CEOs are not slowing down. Earlier this month, Anthropic inked a $13.7 billion compute agreement while OpenAI held early talks with investors about another private funding round. Later, NVIDIA CEO Jensen Huang, the most important voice in AI, said:
“The fact that this is going to be the end of humanity – it’s complete nonsense. The fact that this is going to destroy half of the American jobs is complete nonsense.”
Mid-term Election Seasonality Suggests Better Days are Ahead
According to historical market data, the months leading up to mid-term elections are the worst time to own stocks in the four-year election cycle. However, after a choppy and frustrating summer market for investors, the good news is that seasonality suggests stocks tend to bottom around now and rally strongly into year-end.
Thursday, stocks across a variety of sectors broke out including Advanced Micro Devices, Tempus AI, Moderna, Super Micro Computer and Aya Gold & Silver Inc.
Bottom Line
While macroeconomic headwinds, geopolitical energy shocks, and relentless media fear-mongering might suggest a market correction is overdue, the resilience of stock price action tells a different story.
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Media Contact
Zacks Investment Research
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Moderna, Inc. (MRNA) : Free Stock Analysis Report
Tempus AI, Inc. (TEM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Ideas feature highlights: NVIDIA, Advanced Micro Devices, Tempus, Moderna, Super Micro Computer and Aya Gold & Silver

2026 Has Been Full of Uncertainty
So far in 2026, Wall Street equity investors have navigated an extremely complex landscape marked by macroeconomic forces, geopolitical pressures, and sector-specific concerns. Inflation has remained stubborn, hovering above the Federal Reserve’s long-term target. Disruptions in key transit areas like the Strait of Hormuz have led to an energy shock, with oil prices jumping 75% in 2026 alone. Recently appointed Fed Chair Kevin Warsh has been forced to tighten monetary policy. Artificial intelligence, the market’s fastest-growing area, has been faced with constant fear, uncertainty, and doubt about AI safety and CAPEX scrutiny. Meanwhile, the labor market is softening, and the upcoming midterm election adds another layer of legislative uncertainty.
The Power of Price Action Vs. News Analysis
In my more than two decades of investing experience, I have learned that the stock market is the master manipulator. Most amateur investors focus too much on news headlines. However, analyzing news headlines alone is a sure-fire way to misinterpret the stock market. Rather than viewing news headlines in a vacuum, investors should focus on the market’s price action in relation to the news.
For instance, if listed all the 2026 uncertainties to someone who does not follow the equity market, they would most likely guess that stocks are in a major correction. The fact is that the stock market has had the proverbial kitchen sink thrown at it, and the S&P 500 Index is just 2% off its all-time highs. Remember, stocks tend to climb the “Wall of Worry.”
Retail Investor Sentiment is in the Gutter
The American Association of Individual Investors (AAII) survey is a widely followed weekly poll that measures the percentage of individual retail investors who feel bullish, bearish, or neutral about the stock market over the next six months. Although the major equity indexes are within a hair of their highs, investor sentiment is extraordinarily negative. In fact, the latest AAII Survey shows the fewest bulls and most bears in over a year.
As George Patton once said, “If everyone is thinking alike, then somebody isn’t thinking.” Historical data backs up this claim. Since the late 1980s, when AAII bulls have fallen below 29% with the S&P 500 Index within 10% of all-time highs, stocks have been higher 100% of the time one month later (9 instances)
AI Safety Concerns are Overblown
Image Source: Zacks Investment Research
Recently, AI stocks corrected after OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei sounded the alarm on AI safety concerns and called for regulation. Despite the fear-mongering from AI leaders, it’s critical that investors read into what these CEOs are actually doing – not what they are saying. David Sacks, former “AI Czar” for the Trump Administration, made an astute observation:
“Dario (Anthropic CEO) has written that we need to “pace the frontier,” and Sam Altman (OpenAI CEO) has agreed. People may be surprised by my response: go ahead. You guys are the frontier. By any reasonable metric – market share, revenue growth, model capability – the two of you have a duopoly on frontier intelligence.”
Despite the alarmism, the top two AI CEOs are not slowing down. Earlier this month, Anthropic inked a $13.7 billion compute agreement while OpenAI held early talks with investors about another private funding round. Later, NVIDIA (NVDA) CEO Jensen Huang, the most important voice in AI, said,
“The fact that this is going to be the end of humanity – it’s complete nonsense. The fact that this is going to destroy half of the American jobs is complete nonsense.”
Mid-term Election Seasonality Suggests Better Days are Ahead
According to historical market data, the months leading up to mid-term elections are the worst time to own stocks in the four-year election cycle. However, after a choppy and frustrating summer market for investors, the good news is that seasonality suggests stocks tend to bottom around now and rally strongly into year-end.
Thursday, stocks across a variety of sectors broke out including Advanced Micro Devices (AMD), Tempus AI (TEM), Moderna (MRNA), Super Micro Computer (SMCI), and Aya Gold & Silver Inc (AYA).
Bottom Line
While macroeconomic headwinds, geopolitical energy shocks, and relentless media fear-mongering might suggest a market correction is overdue, the resilience of stock price action tells a different story.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).

Super Micro Computer, Inc.

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