Buffett Brain · Research note
Score updated 22 Oct 2026 · analysis from 10 Jun 2026
SMCI· Technology
Super Micro Computer
Super Micro Computer's 57.65% revenue growth is impressive, but its low gross margins and unclear moat raise concerns about long-term durability.
Buffett fit
Partial fit
Owner
20
Durability
89
Management
71
Price
71
Score updated 22 Oct 2026 · analysis from 10 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Technology stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Super Micro, I'd be encouraged by the 57.65% revenue CAGR and 33.94% EPS CAGR over the past five years.
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The 10-year test suggests durability, evidenced by consistent profitability over the last five years.
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Management has increased market cap significantly compared to retained earnings, with a 6.06 market cap increase versus retained earnings.
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With an earnings yield of 6.72%, the price seems fair but not a bargain.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1Revenue CAGR of 57.65% over the last five years indicates strong growth potential.
- 2Consistent profitability over the last five years, with net income of $1.05B.
- 3 of $1.53B suggests healthy cash generation.
- 4Interest coverage of 11.0 indicates strong ability to meet interest obligations.
Concerns
5- 1 of 8.39% is far below the sector's top-quintile cutoff of 72.1%, indicating issues.
- 2 of 4.48% is significantly lower than the sector's top-quintile cutoff of 14.7%.
- 3 (TTM) of 7.06% is below the sector's top-quintile cutoff of 11.9%, raising questions about competitive strength.
- 4Share count CAGR of 3.63% indicates potential dilution of ownership value.
Price history
$33.72+852.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Super Micro Computer develops high-performance server and storage solutions, generating $21.97B in revenue. Its modular architecture allows for flexibility in product offerings, but at 8.39% are significantly below the sector's top-quintile cutoff of 72.1%. The unit economics suggest a challenging pricing environment.
What other investors would say
The same company, judged by three other documented playbooks.
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