**Super Micro Computer: Growth Without Leverage (Rating Downgrade)**
*Semiconductor Analyst | 758 Followers*
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Super Micro Computer (SMCI) has been downgraded to a **hold** rating due to disappointing execution, despite strong AI demand and ongoing capacity expansion narratives.
SMCI reported two consecutive quarters of revenue and EPS misses, accompanied by weak guidance and declining profitability amid intensifying competition. Although the company continues to grow revenue, this growth is not translating into proportional EPS gains, raising concerns about operational leverage and cost control.
In contrast, SMCI’s peers are outperforming the company in both earnings and growth metrics, making SMCI a less attractive investment until margins stabilize and execution improves.
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**Analyst Commentary**
When I last wrote about Super Micro Computer in August, my view was that expectations had finally been reset, and that executing on guidance would be sufficient to drive the stock higher. Instead, subsequent results have fallen short of those expectations.
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**About the Author**
I am a full-time analyst and portfolio manager of a technology fund, with five years of experience. I hold degrees in Mechanical Engineering from the Federal University of Rio de Janeiro (Brazil) and École Centrale de Lyon (France). Currently, I am licensed by the Brazilian Securities Commission (CVM) as both a portfolio manager and an investment consultant, and I completed CFA Level II in 2024.
Prior to my current role, I worked in the oil and gas sector before transitioning to global equities investing, initially focusing on companies like NVIDIA in 2017. As a mechanical engineer, I have a strong enthusiasm for disruptive technologies, especially in hardware-related fields.
On this platform, I share investment ideas primarily in semiconductors, robotics, and energy sectors. I favor companies operating within oligopolistic industries that have high barriers to entry, and tend to avoid smaller companies due to underestimated risks.
Writing is a passion of mine, and I have published books on other topics. My goal is to provide small investors with valuable investment ideas. My investment approach emphasizes growth at a reasonable price, with a mid- to long-term horizon.
**Keep investing!**
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**Analyst’s Disclosure:**
I/we have no stock, options, or similar derivative positions in any companies mentioned, and no plans to initiate such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation other than from Seeking Alpha. I have no business relationship with any company mentioned.
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**Seeking Alpha Disclosure:**
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