SMCI's Rack-Scale AI Strategy: Is it the Next Growth Engine?

Super Micro Computer SMCI in its first-quarter fiscal 2026 mentioned that it scaled up to an internal power capacity of 52 megawatts and is on track to scale up its rack capacity to 6,000 racks per month, including 3,000 direct liquid cooling racks within fiscal 2026 as the demand for these products rises to support AI and HPC workloads.SMCI offers its rack-scale compute architecture for large-scale AI training, enterprise AI inference and training, visualization and design, content delivery and virtualization and AI edge. These racks come with NVIDIA HGX B200 8-GPU systems, NVIDIA GB200 Grace Blackwell SuperChip, HGX H100/H200 SXM 8-GPU or 4-GPU nodes, NVIDIA H100 NVL & H200 NVL, NVIDIA L4 GPUs and NVIDIA RTX PRO 6000 Blackwell GPUs.Furthermore, SMCI’s upcoming facilities in the United States, Taiwan, Malaysia, the Netherlands, and the Middle East are explicitly designed for rack-level production, not just server assembly. For SMCI, rack-scale plug-and-play servers have become an integral part of its larger data center building block (DCBBS) strategy.However, the rack-scale deployment is affecting SMCI as the company has to incur higher costs and lower margins as it scales a new mega-scale GB300 optimized rack platform. SMCI faced a headwind in the form of revenue decline in the first quarter of fiscal 2026, as its shipments were delayed to the second quarter due to a custom rack platform upgrade.However, it is evident that the demand for SMCI’s rack-scale products is rising as the company has been able to approximately treble its revenues in the past two years. For fiscal 2026, the Zacks Consensus Estimate for SMCI’s revenues is pegged at $36.5 billion, indicating year-over-year growth of 66%.How Competitors Fare Against SMCISuper Micro Computer competes with Dell Technologies DELL and Hewlett Packard Enterprise HPE in the AI and data center market. Dell Technologies and Hewlett Packard Enterprise are both major suppliers of servers and storage systems, with a broad customer base across enterprises and cloud providers.In the rack scale server domain, Dell provides solutions like Dell Integrated Rack 5000 Series for the highest level GPU density in standard racks with advanced thermal management and Dell Integrated Rack 7000 Series with 21-inch open compute project standards meant to support multiple generations of CPUs and GPUs. Hewlett Packard Enterprise offers the ProLiant series.SMCI’s Price Performance, Valuation and EstimatesShares of Super Micro Computer have plunged 34% in the past six months against the Zacks Computer – Storage Devices industry’s growth of 65.9%.SMCI 6-Month Performance ChartImage Source: Zacks Investment ResearchFrom a valuation standpoint, SMCI trades at a forward price-to-sales ratio of 0.46, lower than the industry’s average of 1.81.SMCI Forward Image Source: Zacks Investment ResearchThe Zacks Consensus Estimate for Super Micro Computer’s fiscal 2026 and 2027 earnings implies a year-over-year increase of approximately 3.58% and 41.5%, respectively. Estimates for fiscal 2026 earnings have been revised downward in the past 30 days.Image Source: Zacks Investment ResearchSuper Micro Computer currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Zacks Naming Top 10 Stocks for 2026Want to be tipped off early to our 10 top picks for the entirety of 2026? History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2025, the Zacks Top 10 Stocks gained +2,530.8%, more than QUADRUPLING the S&P 500’s +570.3%.Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2026. Don’t miss your chance to get in on these stocks when they’re released on January 5. Be First to New Top 10 Stocks >>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 Dell Technologies Inc. (DELL): Free Stock Analysis Report Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report Hewlett Packard Enterprise Company (HPE): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks