Super Micro Computer Stock: A Cautionary Tale Amid Record Backlog

Super Micro Computer presents investors with a puzzling contradiction. The company boasts an order backlog worth $13 billion for Nvidia’s Blackwell platform, yet its shares trade around $32—far below the most optimistic analyst price targets. This divergence highlights a critical concern overshadowing the impressive headline figure.

Despite the staggering $13 billion backlog, skepticism persists on Wall Street. The core issue is margin compression. The AI server market is characterized by fierce competition between OEMs and ODMs. While Super Micro has been successful in securing large orders, this appears to have come at the expense of near-term profitability.

The company’s most recent quarterly results underscore this challenge. For the first quarter Read more...