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# Super Micro Computer: Growth Is Great, Margin Pressure May Last A Bit Longer (Archive)
- URL: https://www.huntingalphas.com/super-micro-computer-growth-is-great-margin-pressure-may-last-a-bit-longer-archive/
- Published: 2024-08-14T08:11:00.000Z
- Updated: 2026-02-27T13:00:44.000Z
- Description: Supermicro’s rapid DLC-led growth is offset by volatile margins and bearish-leaning technicals.
- Author: Vish (Hunting Alphas)
- Tags: 5-Minute Pitches, #noindex, Archive, #sa-origin, SMCI, Tech

*This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.*

## Elevator Pitch

- Boosted by a rapid increase in penetration of direct liquid cooling and a dominant market leadership, Super Micro Computer is on an impressive growth track.
- Gross margins seem to still be a bit volatile and unpredictable, as Q4 FY24 delivery was meaningfully below management's guidance despite accounting for some of the higher supply-side costs.
- The company's gross margin guidance for Q1 FY25 seems to indicate a slower ramp up to the longer-term target range.
- Valuation multiples have moderated sharply after a parabolic run-up. Now, the stock trades at a modest (arguably partly deserved) premium to its historical trading range.
- Technically, relative to the S&P 500, I see scope for further downside and hence underperformance vs. the market. However, I expect a few relief rallies (moments of outperformance) along the way.

Read the full article [here](https://seekingalpha.com/article/4714339-super-micro-computer-stock-q4-great-growth-margins-pressure-may-last-longer-hold?ref=huntingalphas.com).

#### Disclosures and Disclaimers

**Past performance ≠ future results. Not investment advice. See* [**full Disclaimer*](https://www.huntingalphas.com/disclaimer/)**.*