SMCI seems to think investors didn't get the message and reiterated guidance a week after earnings. Sovereign AI Factory installs in the pipeline should continue to fuel and accelerate FY2027.

It's fairly obvious that SMCI is planning on $100+ billion annual sales based on their expansion plans. Those plans are based on proprietary customer visibility that has probably been shared with Nvidia (locking in GPU allocation) and financial institutions providing their growth financing. If the CEO is right, then the market cap doesn't properly reflect a future elite Fortune 50 company.

>BENZINGA 5:40 PM ET 5/11/2026 Supermicro reiterated its Fiscal Year 2026 business outlook as previously stated on May 5, 2026. The Company expects net sales in the range of $11.0 billion and $12.5 billion for the fourth quarter of fiscal year 2026 ending June 30, 2026, GAAP net income per diluted share of $0.53 to $0.67 and non-GAAP net income per diluted share of $0.65 to $0.79. The Company's projections for GAAP and non-GAAP net income per diluted share assume a tax rate of approximately 19.4% and 20.4%, respectively, and a fully diluted share count of 695 million shares for GAAP and fully diluted share count of 712 million shares for non-GAAP. The outlook for the fourth quarter of fiscal year 2026 GAAP net income per diluted share includes approximately $95 million in expected stock-based compensation, net of related tax effects of $30 million that are excluded from non-GAAP net income per diluted share.

First, the software attach is accelerating. Management said high margin data center management software revenue went from under $10M per quarter a few quarters ago to $34M last quarter and more than $46M booked this quarter. Combine that with the growing Services contract base and you have compounding high margin Annually Recurring Revenue.

Second, the Design/consulting business for Sovereign AI Factories is scaling and SMCI is aggressively staffing to support this high demand high margin profit center. Management said, “We continue to grow that service team, consulting team, and the revenue continue to grow,”. That supports the thesis that design, consulting, and integration work inside DCBBS can improve overall mix and margins.

Third, backlog is still the big demand signal. The company said backlog reached another record high, and sovereign AI projects are clearly part of that pipeline. DataVolt is one example, and Hannam University is another recent sovereign customer. Partner and customer loyalty remain strong.

SMCI is increasingly looking like an AI Factory Prime Contractor with an expanding software and services stack, and not just a box builder/server vendor.

Anthropic’s CEO said the company expected roughly 10x growth in first quarter but is instead seeing about 80x, and that the surge has created real compute constraints. On CNBC today, Anthropic CEO said regarding compute, “we are going to acquire as much as we can get.” 

Anthropic also signed a deal to use the full capacity of Colossus 1 in Memphis, giving it access to a private AI cluster reported at roughly 300 MW and more than 220,000 Nvidia GPUs. That suggests frontier-model demand is now spilling beyond hyperscalers and into large external private-cluster arrangements. Bullish for SMCI.

Elon Musk is demonstrating that Compute is a more valuable currency than cash. He successfully acquired Cursor over Microsoft and VC cash bids by offering essential Compute resources as part of the package. Of course, this means he needs to build more Compute to fuel his wheel strategy.

Thesis:
SMCI’s DOJ panic was mispriced, Q3 reset the narrative, and the valuation at $34–35 still assumes depressed margins.

1. DOJ Panic Was Mispriced

The DOJ filing (Mar 18) targeted individuals, not SMCI the corporation.

• No corporate indictment
• No Deferred Prosecution Agreement
• No export‑control charges. SMCI was the victim of Liaw scheme.
• No impact to operations or guidance

The stock traded like SMCI itself was charged → collapsed into the $20s.
But the corporate risk was effectively zero.

2. Q3 Reset the Narrative

Q3 (May 6):

• $10.2B revenue (+122% YoY)
• 9.9% gross margin
• FY26 $40B guide reaffirmed
• Stock +24% to $34.67

Two key signals:

A. Margins held at ~10%

Bears expected a collapse.
Instead, SMCI showed stability with a path to 12% as rack‑scale grows.

B. $40B FY26 guide is intact

This is the valuation anchor.
At $34–35, the market is still pricing SMCI like margins stay at the low end.

3. Margin‑Based Valuation: Low End vs High End

Base Case (Low‑End Margin Range: 9.5–10%)

At FY26 $40B revenue:

• EBITDA = $3.8B–$4.0B
• EV/EBITDA at $34–35 = ~6×
• EV/Sales = ~0.6×

This is below peers with lower growth and lower AI mix.

A simple normalization to 0.7× EV/Sales = $42/share.

Upper Case (12% Margin Path)

At 12% margin:

• EBITDA = $4.8B
• EV/EBITDA = ~5× at current price
• EV/Sales = 0.6× → 0.8× re‑rate is reasonable

A move to 0.8× EV/Sales = $50/share.

This is still not expensive given:

• AI rack‑scale mix
• Sovereign demand
• GPU cloud customers
• Multi‑quarter backlog visibility

4. Why the Re‑Rate Is Logical

This is the classic sequence:

1. Fear event hits the stock
2. Fear proves non‑material
3. Company prints a blowout quarter
4. Margins stabilize
5. Market re‑rates the multiple

SMCI is now in stage 4 → 5.

The stock already moved from the $20s → $34, but the multiple is still pricing:

• Low‑end margins
• No backlog visibility
• DOJ overhang that no longer exists. CEO made an emphatic defense of the company during the earnings call. Company says customer and partner relationships have not been harmed.

That’s misaligned with the fundamentals.

5. Catalysts

• AI backlog visibility (CNode-X, Cerebras, DGX‑X, sovereign infrastructure)
• Margin expansion toward 12%
• DOJ silence / resolution
• Working capital normalization
• GPU supply loosening
• Rack‑scale mix shift

SMCI is still priced like margins stay at the low end.
But Q3 showed stability and a path to 12%.

Using a margin‑range framework:

• Low‑end margins (9.5–10%) → $42
• High‑end margins (12%) → $50

The DOJ event was mispriced, the fundamentals are intact, and the re‑rate has only begun. Dell experienced a 50% re-rate after their earnings call. An Nvidia breakout or AI sentiment shift would add fuel to the SMCI re-rate. Rosenblatt and Needham have updated $40 price targets on SMCI.

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SMCI is already an investor in nuclear startup Ampera.

BENZINGA 8:04 AM ET 5/06/2026

NANO Nuclear Energy Inc. (NNE) ("NANO Nuclear" or "the Company"), a leading advanced nuclear micro modular reactor (MMR) and technology company focused on developing clean energy solutions, today announced it has entered into a Memorandum of Understanding (MOU) with Super Micro Computer, Inc.(SMCI) ("Supermicro"), a global leader in high-performance, high-efficiency server and AI infrastructure solutions.

This strategic collaboration is focused on exploring the integration of NANO Nuclear's advanced microreactor systems with Supermicro's industry-leading AI server and data center platforms, with the goal of delivering clean, reliable, and scalable nuclear-powered solutions for the rapidly expanding artificial intelligence economy.

"This collaboration with Supermicro represents a powerful convergence of two transformative technologies: advanced nuclear energy and artificial intelligence infrastructure," said Jay Yu, Chairman and President of NANO Nuclear. "The AI revolution is fundamentally an energy challenge, and we believe nuclear power is the only scalable solution capable of meeting that demand. By working alongside one of the world's leading providers of AI server technology, we are positioning NANO Nuclear at the forefront of a new paradigm, where data centers are not constrained by the grid, but powered by dedicated, on-site nuclear energy systems."

Supermicro is one of the world's leading providers of end-to-end green computing solutions, delivering advanced server, storage, and networking systems for data centers, cloud providers, and enterprise customers globally.

By partnering with Supermicro, NANO Nuclear gains direct alignment with a company at the forefront of the AI infrastructure buildout, providing:

• Access to global data center customers and hyperscale operators.
• Integration pathways with state-of-the-art AI hardware ecosystems.
• A channel into one of the fastest-growing sectors of the global economy.

At the same time, Supermicro gains access to NANO Nuclear's next-generation nuclear power systems, enabling it to offer customers a complete, vertically integrated solution: compute + power.

This MOU represents a major step forward in NANO Nuclear's strategy to become a leading energy provider for the AI and data center sector, which is rapidly emerging as one of the largest future consumers of electricity globally.

As grid constraints intensify and power availability becomes a limiting factor for AI deployment, NANO Nuclear's microreactors offer a compelling solution:

• 24/7 baseload power independent of the grid.
• Carbon-free energy aligned with ESG mandates.
• Scalable deployment for data center campuses.
• Rapid installation and modular expansion.

This positions NANO Nuclear not just as a reactor developer, but as a critical enabler of the global AI economy.

"This is exactly where the future is heading compute and power becoming a unified solution," said James Walker, Chief Executive Officer of NANO Nuclear. "By aligning with Supermicro, NANO Nuclear is stepping directly into the center of one of the fastest growing and most capital-intensive markets in the world. This partnership opens the door to hyperscale opportunities that could redefine how data centers are built and powered."

The MOU outlines a framework under which both companies will mutually introduce sales opportunities, collaborate on joint deployments, and explore integrated solutions combining:

• NANO Nuclear's microreactors including the KRONOS MMR™ Energy System.
• Supermicro's server racks and AI systems.
• Cooling, maintenance, and lifecycle services.

Together, the companies aim to create a next-generation infrastructure model where computing power and energy supply are developed in tandem.

Orchestration software was originally open source and free. Customers are now recognizing the value proposition being offered by SMCI Super Cloud Composer.

• Super Cloud Composer that manage tens of thousands of systems or racks in real time.
• It provides comprehensive control over system and rack level power usage, cooling status, safety condition and device utilization alongside many other critical features management software feature also include advanced CPU and GPU workload orchestration which is a critical function for today's AI data center.
• The revenue from this new software product line is finally growing at a tremendous pace, increasing from less than $10 million per quarter just a few quarters ago to 34 million last quarter and more than $46 million booked for this quarter.
• By bundling subscription based software and service alongside our hardware, we are strengthening our customer relationship and improving our long term profitability.

 

ACCESS NEWSWIRE 7:30 AM ET 5/05/2026

MIAMI, FL / ACCESS Newswire / May 5, 2026 / Digi Power X Inc. (DGXX) (Cboe Canada:DGX) (the "Company" or "Digi Power X"), an AI data center infrastructure operator, today announced the execution of a Master Services Agreement (the "Agreement") with Cerebras Systems (the "Customer") for the colocation of a purpose-built, 40 megawatt ("MW") AI data center campus located in Columbiana, Alabama (the "Facility").

The initial 10-year term is valued at approximately $1.1 billion, with total potential contract value of up to $2.5 billion inclusive of renewal terms - underpinned by a structure that provides Digi Power X(DGXX) with long-term revenue visibility, and Cerebras with guaranteed data center capacity, from the first day of service.

Digi Power X (DGXX) will develop and deliver the Facility in two phases: Phase 1 comprising 15 MW of IT load, followed by Phase 2 delivering an incremental 25 MW for a combined total of 40 MW. The Facility will be purpose-built to Tier III infrastructure standards optimized for the high-density thermal requirements of next-generation AI accelerator hardware.

This Agreement reflects the deep commitment that both companies are making to the Columbiana campus - a facility designed from the ground up around the power density and reliability demands of frontier AI compute.

"This agreement is transformational for Digi Power X(DGXX). Signing a $1.1 billion anchor contract with a premier AI compute company is validation of everything we have built - our team, our sites, our infrastructure capabilities, and our vision for what a next-generation data center operator looks like. We are no longer building toward the top tier of this industry. We are in it."

- Michel Amar, Chairman & Chief Executive Officer, Digi Power X Inc.(DGXX)

Immediate Construction & Accelerated Deployment

Digi Power X (DGXX) will commence construction immediately on Phase 1, reflecting the Company's readiness across power, site development and long-lead equipment procurement.

Initial Deployment	40MW critical IT load
Construction Start	Immediate
Phase 1 Ready-for-Service	Targeted December 15, 2026
Full Deployment	Targeted by end of Q1 2027

The Columbiana, Alabama campus was selected for its access to robust power infrastructure, a favorable regulatory environment, and proximity to major fiber corridors serving the southeastern United States. Digi Power X(DGXX) owns the underlying real property, providing a balance-sheet-backed development platform that differentiates the Company from lease-dependent competitors.

The Company has already completed construction of the dedicated on-site substation serving Phase 1, with grid interconnection finalized and a power delivery agreement in place with Alabama Power - minimizing two of the most significant development risk factors typically associated with large-scale data center projects and positioning the Columbiana campus for an accelerated construction timeline.

Digi Power X (DGXX) plans to commence site development immediately and targets Phase 1 Ready-for-Service in December 2026, with Phase 2 delivery to follow. Phase 1 construction is being self-funded by the Company, reflecting Digi Power X's(DGXX) financial commitment to the Columbiana campus and its confidence in the long-term value of this partnership.

"This deal is a statement. Closing a contract of this magnitude with one of the prominent emerging companies of the AI era signals Digi Power X(DGXX) is a serious player operating at the highest level. This is the kind of landmark transaction that we believe will open the door to additional sophisticated tenants, lenders, and partners."

- Alec Amar, President, Digi Power X Inc.(DGXX)

"The buildout of high-density AI infrastructure is one of the defining challenges of our generation, on the scale of the rollout of 4G and 5G that transformed global connectivity. This agreement reflects Digi Power X's(DGXX) vision, the strength of its team, and its ability to execute as a foundational player. I'm proud to be part of what Digi Power X(DGXX) is building."

- Hans Vestberg, Senior Advisor, Digi Power X Inc.(DGXX); Former Chairman and CEO, Verizon Communications; Member, Board of Directors, BlackRock

Strategic Significance

The Agreement is expected to be a core driver of Digi Power X's(DGXX) forward revenue growth.

• Revenue commencement: Expected late 2026.
• Full revenue ramp: Upon completion of full deployment, targeted in Q1 2027.
• Upside: Customer expansion option for an additional $1.4 billion.

SMCI’s Q2 finished‑goods inventory jumped to a level representing over half of projected Q3 revenue — an extreme outlier for a company that normally ships systems as soon as they’re built. Because this inventory is reported as generic finished goods, not contract assets or customer‑specific WIP, the assumption is that none of it is locked into fixed‑price deliveries. SMCI owns it outright and can reprice, redirect, or rebundle it as market conditions allow.

In a compute‑scarce environment — tight Blackwell supply, strong H100/H200 demand, sovereign AI urgency — finished goods become a strategic asset, not a liability. They give SMCI the ability to:

• Deliver immediately
• Capture premium pricing
• Accelerate revenue recognition
• Out‑maneuver competitors still waiting on components

And a meaningful portion of this inventory is almost certainly high margin DCBBS support hardware (800G networking, NVMe‑oF storage, power shelves, BBUs, CDUs, manifolds, cabling, rack frames).

The finished‑goods spike looks far more like SMCI pre‑building AI‑factory infrastructure that can be sold to the highest‑urgency buyer at premium market pricing during FY26Q3. That’s a setup for both revenue acceleration and margin upside in Q3.

SMCI took a $45M inventory write‑down (Feb 11, 2025), but it was a reserve increase, not a disposal — meaning the Hopper/H100 inventory is almost certainly still on hand at a deeply discounted cost basis. Recently, H100 demand and pricing have surged (rental rates up ~40%), so any sale of that written‑down inventory now converts into near‑pure gross profit. With Q3 revenue guided around $12B, monetizing even part of that $45M pool could lift gross margins by 30–45 bps, a tailwind the Street isn’t modeling. It’s a stealth catalyst hiding in prior‑year adjustments.

Non-Disclosure Agreements make it difficult for SMCI to promote Sovereign AI customer wins, but I've summarized what I've found. There are likely other projects that remain confidential until the customer does the reveal like the huge Hannam project. Sovereign AI projects are typically high margin customized, secure and high performance. They are also captive for refresh and expansion cycles over many years contributing to Annual Recurring Revenue.

The Middle East sites are rerating to even higher revenue opportunities given the conflict in the region. The datacenter designs will likely transition from commercial to mil-spec military grade installations at significantly higher margin and higher cost. We see this in the Korean EMP shielded datacenters already. UAE has announced they are leaving OPEC so that they can pump more oil to help support their infrastructure needs.

Last week, SMCI also opened a new UK office to further support Sovereign AI rollout in Europe.

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Region	Counterparty / Project	Evidence SMCI Is Involved	Sovereign‑AI Angle
Saudi Arabia	DataVolt hyperscale AI campuses	$20B multi‑year MOU; SMCI to supply ultra‑dense GPU platforms, racks, DLC‑2 cooling for gigawatt‑class AI campuses in KSA & US	Core national AI infrastructure aligned with Vision 2030; effectively Saudi sovereign AI compute
UAE	EHC Investment – Sovereign AI Modular Data Centres	Strategic relationship to deploy “Sovereign AI Modular Data Centres (MDCs)” using SMCI DCBBS rack‑scale architecture; 6–9 month MDC deploy cycles	Explicitly branded “sovereign AI” infrastructure for UAE, with in‑country modular AI DCs
Korea (SK Telecom)	SK Telecom AIDC modular DCs + AI‑RAN/sovereign AI	SKT–SMCI–Schneider MOU on prefab modular AI data centers; SMCI provides high‑performance GPU servers. SMCI also cites SKT as a sovereign‑AI/AI‑RAN partner with >1,000 AI servers in the Haein cluster	SKT is a designated national AI player; Haein cluster + modular AIDC are de‑facto Korean sovereign AI compute
Korea (Hannam University)	Hannam University National AI Compute Campus	SMCI VP Kevin Chang attended groundbreaking; SMCI named as AI server provider. Project includes 320,000 NVIDIA Rubin GPUs and large‑scale liquid‑cooled AI datacenter	One of the world’s largest sovereign‑AI builds; Korean government‑aligned national AI compute hub
Japan	Sakura Internet “Koukaryoku” AI cloud	Sakura “adopted the high‑performance AI‑optimized GPU server Supermicro SYS‑821GE‑TNHR HGX 8‑GPU” to launch Koukaryoku AI cloud with NVIDIA HGX 8‑GPU platform	Domestic, in‑country GPU cloud for generative AI, LLMs, etc.—functionally a Japanese sovereign AI cloud building block
EU – Norway	Telenor AI Factory (Norway’s first sovereign AI cloud)	SMCI infra powers Telenor’s AI Factory, described as “Norway’s first in‑country, enterprise‑grade sovereign AI cloud platform”	Directly labeled sovereign AI; in‑country GPU cloud for regulated workloads
EU – Benelux	Nebul HGX B200 supercluster	Nebul deploys “Supermicro HGX B200 Supercluster… for Sovereign AI” – largest B200 deployment in Benelux	Explicitly framed as European sovereign AI infrastructure with GDPR‑compliant private GPU cloud