Super Micro Computer Stock Pulls Back to Support – Smart Entry?
Super Micro Computer (SMCI) stock should be on your watchlist. Here is why – it is currently trading in the support zone ($36.88 – $40.76), levels from which it has bounced meaningfully before. In the last 10 years, Super Micro Computer stock received buying interest at this level 5 times and subsequently went on to generate 37.2% in average peak returns.
| Peak Return | Days to Peak Return | |
|---|---|---|
| 10/2/2024 | 17.0% | 27 |
| 11/25/2024 | 15.0% | 14 |
| 2/12/2025 | 51.8% | 7 |
| 5/13/2025 | 56.1% | 78 |
| 9/3/2025 | 46.3% | 35 |
But is the price action enough alone? It certainly helps if the fundamentals check out. For SMCI Read Buy or Sell SMCI Stock to see how convincing this buy opportunity might be.
No matter where SMCI stock goes, your portfolio should stay on track. See how High Quality Portfolio can help you do that.
Here are some quick data points for Super Micro Computer that should help decision:
- Revenue Growth: 11.9% LTM and 63.1% last 3 year average.
- Cash Generation: Nearly 1.0% free cash flow margin and 4.4% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in last 3 years for SMCI was 37.1%.
- Valuation: SMCI stock trades at a PE multiple of 29.2
For quick background, Super Micro Computer provides high-performance modular server and storage solutions, including servers, blades, racks, and networking devices for enterprise data centers, cloud computing, AI, 5G, and edge computing markets.
| SMCI | S&P Median | |
|---|---|---|
| Sector | Information Technology | – |
| Industry | Technology Hardware, Storage & Peripherals | – |
| PE Ratio | 29.2 | 23.6 |
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| LTM* Revenue Growth | 11.9% | 6.1% |
| 3Y Average Annual Revenue Growth | 63.1% | 5.4% |
| Min Annual Revenue Growth Last 3Y | 37.1% | 0.2% |
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| LTM* Operating Margin | 4.4% | 18.8% |
| 3Y Average Operating Margin | 7.4% | 18.2% |
| LTM* Free Cash Flow Margin | 1.0% | 13.5% |
*LTM: Last Twelve Months
What Is Stock-Specific Risk If The Market Crashes?
SMCI isn’t immune to big drops. It fell 66% during the Global Financial Crisis, 60% in the 2018 correction, and about 46% through the Covid pandemic. Even the inflation shock last year saw a 34% decline from peak to trough. The stock shows solid fundamentals, but these dips remind us that risk is real when markets turn sour. No matter how strong the setup, volatility hits hard.
But the risk is not limited to major market crashes. Stocks fall even when markets are in good shape – think events like earnings, business updates, outlook changes. Read SMCI Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.