Is Super Micro Computer Stock Underperforming the S&P 500?

San Jose, California-based Super Micro Computer, Inc. (SMCI) develops and manufactures high-performance server and storage solutions based on modular and open architecture. With a market cap of $25 billion, Super Micro’s operations span the United States, Europe, Asia, and internationally.

Companies worth $10 billion or more are generally described as "large-cap stocks," Super Micro fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size and influence in the digital infrastructure industry. Its solutions include a range of rack mount and blade server systems, as well as components.

However, it's not all rainbows and sunshine, SMCI stock has tanked 63.3% from its 52-week high of $114.78 touched on Mar. 18, 2024. Although the stock has gained 15.7% over the past three months outpacing the S&P 500 Index’s ($SPX) 6.8% decline during the same time frame, it's primarily due to the stock recovering from its 52-week low of $17.25 touched on Nov. 15 last year.

SMCI’s performance looks much grimmer over the longer term. SMCI stock plunged 7.8% over the past six months and 62.7% over the past 52 weeks, underperforming SPX’s 23 bps uptick over the past six months and 9.5% gains over the past year.

To confirm the bearish trend, SMCI has remained mostly below its 200-day moving average since the start of August 2024 and traded along its down-trending 50-day moving average over the past year.

The drop in SMCI’s stock price over the past year was primarily fueled by corporate governance failures at the company which shattered investor confidence. Nonetheless, Super Micro Computer’s stock gained 12.2% in the trading session after the release of its Q2 2025 10Q filings on Feb. 25. The company’s net sales for the quarter increased 54.9% year-over-year to $5.7 billion. Meanwhile, SMCI observed an even faster increase in the cost of sales and operating expenses, which led to a massive gross and operating margin contraction during the quarter. Despite the massive growth in sales, its income from operations dipped 76 bps compared to the year-ago quarter to $368.6 million.

On a more positive note, the company observed a notable improvement in cash flows. Its cumulative operating cash flow for the past two quarters increased to $169.1 million, up from the $324.6 million outflow recorded during the same period in the previous fiscal. However, after the initial positive momentum, SMCI stock plummeted nearly 16% in the following trading session.

Super Micro has also significantly underperformed its peer Arista Networks, Inc.’s (ANET) 17.6% gains over the past 52 weeks and a 7.2% dip over the past six months.

Among the 14 analysts covering the SMCI stock, the consensus rating is a “Hold.” Its mean price target of $58.50 represents a 38.7% premium to current price levels.