Before You Chase SMCI’s SpaceX Rally, Remember This Rocket Has Misfired Before

Supermicro (SMCI) has had a good past few days. SMCI stock surged after the company reported that it now expects gross margins to land between 15% and 17% instead of the previous guidance of 8.2% and 8.4%. Just last month, CEO Charles Liang also pointed to a partnership with SpaceX (SPCX) for an AI data center within a year. These developments seem to suggest improving fundamentals. But once bitten, twice shy. Investors need to look at things from a different lens, as this isn’t just another AI infrastructure story.

To begin, Supermicro’s revenue guidance hasn’t changed, and revenue is expected to land at the lower end of guidance. At the same time, the backlog has increased, suggesting the company is taking orders much faster than it can serve them. If the margins are doubling, it certainly isn’t happening because of increasing revenue. So, where is the gross margin improvement coming from? It probably isn’t coming from a durable shift in pricing power — and could therefore reverse just as quickly.