The last 52 weeks have been characterized by high volatility for Super Micro Computer (SMCI) stock. During this period, SMCI stock reached a high of $66.44. However, the current price of $32.64 implies a deep correction of 51%.
One of the key triggers for the correction was a big revenue miss in Q1. Having said that, the reaction seems to be overdone. The bearish sentiment, however, sustains and is indicated by the fact that SMCI is the third-most-shorted stock by hedge funds.
Amid this bearish stance, SMCI stock looks attractively valued, and an improvement in Q2 numbers can change sentiments at the blink of an eye. SMCI stock can therefore be a potential short squeeze candidate for 2026.
Headquartered in San Jose, Super Micro Computer is a provider of application-optimized IT solutions for Enterprise, cloud, AI, and 5G. The company’s products include servers, storage systems, switches, software, and support services.
Super Micro Computer has a strong global presence with operations in more than 100 countries. For Q1 FY26, the company reported revenue of $5 billion with a gross margin of $5 billion. For the full year, SMCI expects revenue of $36 billion.
Following the significant earnings miss in Q1, coupled with cash used in operations of $918 million, SMCI stock has corrected by 45% in the last six months. The deep correction seems like a good opportunity to accumulate.
While the Q1 miss impacted SMCI stock, it’s worth noting that the company has guided for Q2 revenue of $10 billion to $11 billion. This is, at the midpoint, more than $2 billion ahead of the analyst consensus of $8.05 billion. Therefore, there is the possibility of a stock trend reversal when Q2 numbers are reported.
From a growth perspective, there are two important points to note. First, SMCI is pursuing aggressive global expansion with new facilities in the U.S., Taiwan, the Netherlands, Malaysia, and the Middle East. The company is aiming to scale production to 6,000 racks per month by the end of fiscal 2026.
