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As many know, they report tonight. Generally, I'm bullish, however it's very difficult to arrive at 'a figure' with any degree of accuracy. Suffice to say the factors which impact their business are all looking very positive.
Analyst consensus is for a Q4 revenue figure of around $5.9B and EPS around 40cents. I am far more interested in the Q1 guide and their EPS guide, which should be at least $1B ahead and my wish list is +$1.5B. This would be around $7.5B at the midpoint(analyst consensus is $6.18B and 60c-they will surely blow that away (it's feasible they manage 90c). I also think GM improved during Q4 and should improve further in Q1 and beyond.
Expect management to talk about the market moving rapidly to liquid cooled solutions and in particular their DLC-2 being the market leading solution. Updates on DLC capacity, hoping for 3k racks per month, new DC deployments being 30-35% DLC and SM's market share being 65-70%.
I was away in sunny Spain last week
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Have you had chance to digest and pick the bones from the figures etc from last night yet Adam …thanking you in advance
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Have you had chance to digest and pick the bones from the figures etc from last night yet Adam …thanking you in advance
@Ducati996R said in SMCI:
Have you had chance to digest and pick the bones from the figures etc from last night yet Adam …thanking you in advance
Ha - I came here to ask that very question!
EPS was 41 cents against 44 expected.
Revenue $5.76bn against $5.89 expected.Shares are down by around 14% today (unsurprisingly).
Revenue for current quarter is "$6-7bn" - somewhat vague.
But these are simple figures; there will be a story behind them which Adam will pick out much better than I ever could.
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I listened to the call last night. The main thing I wanted to see was margin being improved and it was flat. I can live with the revenue although I also wanted to see +1.5B at the midpoint i.e a $7-$8B guide. All told we made 200% realised and a further 71% unrealised (real time) based in dollars so a few points +/- on the fx.
For me this earnings call was their opportunity to back up the talk with action. They didn't have a lot of conviction in their statements. I'm very happy with the returns over a short period of time but with questions remaining over their margin expansion and other opportunities I don't think it's a long term hold.
With all investment decisions there is opportunity cost and another big factor for me is a management team who have a very clear view of their execution plan and the sector they operate in.
I think SM management lack the visibility. But in saying that, SM earn more money than HPE and Dell. Dell in particular are making almost nothing from their AI racks...2% net.
What I see with AI servers is a primary mover, being Nvidia, racing at such a pace with annual updates(architecture), their ODMs are finding it difficult to keep pace, not to mention expensive.
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There are new opportunities being worked up and in due course we will let you know
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As always appreciate your insights
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Having had a few days to think about it, where's the future for SMCI? Their stock has continued to slide in the last couple of days although it's only down about 5% in the last month.
Does it have a future? Ether short- or long-term? If the chaps at Cobens looking at getting out then what's the horizon on this?
And what would anyone suggest I should do with the grand or so's worth of SMCI I hold outside of Cobens? Flog it? Flog half of it? Keep it for sh1ts and giggles? I'm in fairly good profit on it so can't complain.
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Our weight changes regularly. On a fundamentals basis the stock is not over valued imo so I am not so much concerned about the multiple. I can't comment on anyones personal Extra-Portfolio holdings.
The ideas im working on at the moment factor. As mentioned it's all about relative opportunities.
