FY2026 GAAP net income

DELL: $5.94B
SMCI: $2.23B

Dell generated about 2.7× more net income than SMCI.

But their net margins were actually quite similar:

DELL: ~5.23%
SMCI: ~5.71%

The really interesting part comes when you look at cash flow.

FY2026 operating cash flow

DELL: +$11.19B
SMCI: -$6.81B

So Dell went from:

$5.94B net income → $11.19B operating cash flow

while SMCI went from:

$2.23B net income → -$6.81B operating cash flow

That's an enormous divergence.

SMCI's issue wasn't that it was losing money. The company was profitable, but enormous amounts of cash were tied up in working capital, particularly inventory and accounts receivable.

In FY2026, SMCI's cash flow was negatively affected by approximately:

• $3.92B increase in accounts receivable
• $8.88B increase in inventory

These were partially offset by increases in accounts payable and deferred revenue.

The encouraging part for SMCI

Q4 FY2026 showed a major improvement:

• Revenue: $11.1B
• Net income: $1.18B
• Operating cash flow: +$747M
• Capex/investments: $25M

That compares with Q3, when SMCI reported approximately $483M of net income but ~$6.6B of negative operating cash flow.

If inventory and receivables normalize, SMCI's cash generation could improve dramatically.

But if working capital continues consuming cash, then the impressive EPS growth is much less valuable than it appears. - My opinion on this is that working capital will keep consuming the cash flow as long as the company is growing. Because profits will eventually end up being used to buy more chips, and sell more of their tech (servers/DCBBS). Only when growth stops being so explosive this company will start making real money.

DELL looks dramatically better on cash-flow quality TODAY, but what about growth opportunity?.

SMCI is the more interesting cash-flow turnaround story: its earnings are already substantial, and Q4 was the first clear sign that operating cash flow can recover.

Now lets talk about VALUATION.

DELL: $302,81B
SMCI: $24,2B

So Dell is worth roughly 12.5x as much as SMCI. Yet the underlying businesses aren't 12.7× apart in profitability. Dell makes 2.7x more profits than SMCI, but has much higher cash flow.

Trailing valuation

Price / Sales

DELL: ~2.45×
SMCI: ~0.56×

Price / FY2026 GAAP Earnings

DELL: ~47×
SMCI: ~9.8×

SMCI is guiding for $65–72B of FY2027 revenue, versus $39.1B in FY2026.

That's roughly 75% growth at the midpoint.

Dell, meanwhile, is guiding for $138–142B of FY2027 revenue and $11.52 GAAP EPS at the midpoint. At $468.65, that's approximately 41× forward GAAP earnings.

If SMCI can get working capital under control and turn its rapidly growing earnings into FCF, 9.8× trailing earnings looks extremely cheap.

If it continues growing revenue while consuming enormous amounts of cash, then the low multiple may be justified.

Post your opinions on the comments below! I know it’s a dramatic company, but fast growing companies are always hard to manage. No

Como é possível crescer em Portugal?
Um trabalhador independente que trabalhe com clientes particulares que não sejam empresas, tem de cobrar IVA (com algumas excepções como médicos professores, fisioterapeutas…) IVA este que tem de ser totalmente absorvido ou parcialmente pelo trabalhador tendo em conta que uma subida de 23% no seu serviço acaba por ser um valor grande. Até aos 15.000€ anuais não é necessário cobrar IVA e após os mesmos, no ano seguinte já se cobra IVA na totalidade das faturas.
Ou seja, no ano seguinte, faturando 17.000€, já iria perder 4000€ em IVA, trabalharia mais horas, para acabar o ano com menos rendimento (13.000€) que no ano anterior foi superior e com menos trabalho.
Eu percebo que existem maneiras de criar valor e etc, já ando a explorar o que posso fazer. No entanto a carteira do cidadão comum não estica, e ao estar a aplicar o IVA, ficaria também difícil subir ainda mais os preços no futuro de modo a melhorar o que posso oferecer e claro a minha qualidade de vida.

Qual a vossa opinião sobre este tema?

SMCI is positioning themselves to be a data center construction colossus. 39B in backlog already for 1st and 2nd quarter 2027 and so on, but this number could be bigger with accumulation of new orders. This is just this whole year(2026) revenue, this could mean we double revenue again next year, even if we keep current margins this dilution could be made back in two years, or less. However management is expecting to have some margin growth with their new most recent products.

This dilution also means SMCI can compound harder in the next couple years, not diluting would mean losing customers, losing present and future growth, absolutely great news!

Nowadays everyone is obsessed with a quick buck, and everyone forgets that a business is not made from air, in this case they need super expensive components, but this will give them huge returns for the future! Any price you buy SMCI below 100 is a good price, the lower the better.

Data centers are the future, and SMCI is positioned right in the middle of it

(Edit: the 39B backlog is subject to delays, confirmations, and cancellations)

This will have little sentences but important stuff, however speculation.

SMCI Is a major supplier for xAI, future SpaceX, and let’s not forget they are raising 75B after IPO.
This massive IPO could be great for SMCI as much as for nvidia of course, and also OpenAI and anthropic IPOs, these will give them more margin for investment in infrastructure. However ties between OpenAI and Anthropic are not known. There was a boutique note talking about SMCI and Celestica producing racks with TPUs for Anthropic but nothing more that I remember. The point is all these IPOs could possibly put even more investment in the AI infra, it’s only beginning, as Jensen said.

Guys, smci being undervalued for this long is a great chance for accumulating.
As my previous post, this stock is still pricing the risk from management competence and so it’s undervalued, if you believe in the company and have been hearing the investor conferences with banks, you should keep buying. The AI demand will last and there is plenty evidence for that. Even if it does not generate as much profit as thought for LLMs like OpenAI and Anthropic, which I doubt, it’s an essential technology that adds value and that every single enterprise should have for internal use with open source models that will certainly evolve. There are still quite some years ahead of us with AI investments ramping up, now we have Inference, training, and AGENTS. And some more stuff might come up. SMCI will always be here adapting for what comes in this infrastructure dependent era.

The short sell researchers gon be silent for a while
This is for old school SMCI investors who are here since the hindenburg research firm short report

This stock has the potential do reach 100B market cap. It should be there already if not for the bad publicity it gets for and from themselves.
- Investigations conclude with SMCI out of the picture.
- market share capture out of the US + some inside of US
- Supply chain keeps getting more solid a faster.
- New contracts for some C suite employees. Means they are improving their C suite.
- Accounting and compliance getting stronger.

30B Mcap = 50$
60B = 100$
90B = 150$

Just look at Dell, AI growth gave them a 3.5x on a 80B valuation. They are now worth 283B

SMCI could EASILY get to 180$ (around 100B MktCap)

https://preview.redd.it/y3co8gem6q4h1.png?width=1472&format=png&auto=webp&s=11c1c70c8c355419eb4dbbabe5eac72a856c953c

DELL is the clearest case. You're getting a company with record AI server backlog of $43B, 33% guided EPS growth, and 123% AI-optimized server order momentum — at a forward P/E around 16–17x. For the growth rate on offer, that's genuinely cheap. The PEG is ~1.4x, which is reasonable in this AI infrastructure cycle.

SMCI is the high-conviction high-risk pick. Q3 FY26 delivered 123% YoY revenue growth with gross margins recovering to 9.9%, and management raised full-year guidance to $38.9–40.4B, nearly doubling FY2025's $21.97B. A sub-1 PEG on triple-digit revenue growth is the entire bull case in a sentence — the market is still discounting SMCI for its earlier accounting and smuggling issues, which creates opportunity. The risk is real (export controls, margin compression), but the reward is priced in differently than the others.

This is good news overall for the AI SERVER Stocks, however this is not great for us, DELL had always been below SMCI on AI server sales, they grew 757% yoy on the ai Segment and SMCI grew like 100%.
Also we have 0 backlog guidance.
My hope for this stock is that we would do exactly what dell is doing.
I will keep holding, we might see action like this in the future, who knows. But selling would not be wise at these valuations