Given the new $60b order received in Q4, what will the reasonable estimate for 2027 revenue? $50b, $60b?

Doing so with help of Gemini.

Using only FY 2026 EPS

Before the update, Wall Street consensus for full-year FY2026 EPS was sitting around $2.13–$2.18. The margin surge significantly alters the Q4 bottom line.

1. Actual FY2026 Results (Q1–Q3)

SMCI’s reported diluted EPS for the first three quarters of FY2026:

Quarter	Reported EPS	Key Context
Q1 FY26	$0.35	Initial inventory adjustment recovery
Q2 FY26	$0.69	AI server delivery momentum builds
Q3 FY26	$0.84	Strong demand beat ($0.84 vs $0.61 consensus)
Q1–Q3 Subtotal	$1.88	Cumulative actual EPS heading into Q4

2. Forecasting Q4 FY2026 EPS

Prior to the preliminary announcement, SMCI guided Q4 revenue to $11.0B–$12.5B with gross margins of 8.2%–8.4% and adjusted EPS of $0.65–$0.79.

Applying the updated Q4 parameters:

• Revenue: Estimated near the low end of guidance (~$11.0 Billion).
• Gross Margin (15.0%–17.0%): Midpoint of 16.0% yields ~$1.76 Billion in gross profit (compared to the ~$935 Million original baseline at 8.3%).
• Operating Expenses: Estimated at ~$650 Million–$700 Million.
• Operating Income: ~$1.06 Billion–$1.11 Billion.
• Effective Tax Rate & Interest (~15%): Yields estimated Net Income of ~$900 Million–$940 Million.
• Diluted Share Count: ~590 Million shares.

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Forecast Q4 FY2026 EPS Scenarios:
 ├── Low Margin / High OpEx (15.0% GM):  ~$1.25 EPS
 ├── Base Midpoint Case (16.0% GM):      ~$1.45 EPS
 └── High Margin / Cost Control (17.0% GM): ~$1.65 EPS

This places forecasted Q4 FY2026 EPS at ~$1.35 – $1.55, roughly double the initial $0.65–$0.79 guidance window.

3. Total FY2026 EPS Calculation

Combining actual Q1–Q3 results with the updated Q4 forecast:

$$\text{FY2026 Total EPS} = \text{Q1-Q3 Actuals (\$1.88)} + \text{Q4 Forecast (\$1.35–\$1.55)} = \mathbf{\$3.23 – \$3.43}$$

• Pre-Announcement Consensus: ~$2.15
• Post-Announcement Forecast: ~$3.30 (+53% upgrade in FY2026 earnings power)

4. Fair Value Range Based on FY2026 EPS

Applying standard price-to-earnings (P/E) multiple frameworks to our updated $3.30 FY2026 EPS baseline:

Valuation Tier	Applied P/E	Fair Value	Rationale
Deep Discount / Bear	10x	$33.00	Reflects ongoing governance reviews and accounting overhangs.
Base Hardware / Systems Multiple	14x	$46.20	Matches standard server integrator multiples (Dell / HPE peer baseline).
Growth / Peer Re-Rating	18x	$59.40	Reflects high-margin liquid cooling leadership and $60B+ order backlog.

Takeaway

Using actual FY2026 execution plus the Q4 preliminary margin upside:

• At ~$25.00–$28.00, SMCI is trading at roughly 7.5x–8.5x FY2026 earnings.
• If the August 11 earnings call confirms that Q4's 15%–17% gross margin is repeatable, a baseline peer multiple re-rating puts fair value comfortably in the $45.00–$60.00 range.

Projecting for FY2027

1. Key Inputs from the Latest Announcement

• Q4 FY26 Preliminary Revenue: $11.0B (at the low end of $11.0B–$12.5B guidance).
• Gross Margin: 15.0% – 17.0% (vs. previous guidance of 8.2%–8.4%).
• New Orders Intake: >$60 Billion in Q4 alone, pushing backlog to record highs.
• Share Count: ~580M to 600M diluted shares (reflecting recent capital raises).

2. Updated Earnings Power Model (FY2027 Run-Rate)

Previously, Wall Street modeled SMCI as a low-margin assembler (~8% to 10% gross margins) producing thin operating margins (~4% to 5%).

If SMCI maintains a 12% to 14% normalized gross margin (conservatively assuming Q4's 15%–17% was a favorable mix peak that settles slightly lower), its bottom-line earnings power expands dramatically.

Scenario Modeling (FY2027 Revenue & EPS)

Metric	Conservative Case	Base Case	Bull Case
Annualized Revenue	$48.0 Billion	$55.0 Billion	$65.0 Billion
Gross Margin %	11.5%	13.5%	15.5%
Operating Expenses	~$2.4 Billion	~$2.7 Billion	~$3.1 Billion
Operating Margin %	~6.5%	~8.6%	~10.7%
Net Income (after tax)	~$2.4 Billion	~$3.6 Billion	~$5.2 Billion
Implied Diluted EPS	~$4.00	~$6.00	~$8.60

3. Fair Value Target Matrix

Historically, SMCI trades at a discount to peers like Dell and HPE due to corporate governance overhangs and margin volatility.

• Historical/Discounted P/E Multiplier: 8x – 10x forward earnings
• Peer Group Benchmark (Dell/HPE): 12x – 15x forward earnings
• Pure-Play AI Growth Multiplier: 16x – 20x forward earnings

Applying these P/E multiples to our Base Case EPS of ~$6.00:

Fair Value Range (Base Case EPS ~$6.00)
 ├── Bear / Deep Discount (8x P/E):   $48.00  (Governance & Execution Discount)
 ├── Mid / Base Case (12x P/E):        $72.00  (Standard Systems Integrator Multiple)
 └── Bull / Peer Match (16x P/E):      $96.00  (Dell/HPE Benchmark Realignment)

Target Valuation Summary

• Prior Stock Price (Pre-Announcement): ~$24.00 – $25.50
• Post-Announcement Pre-Market Price: ~$30.00 – $31.00 (+18% to +20% jump)
• Estimated Fundamental Fair Value: $65.00 – $75.00

The Moon is here !!! 🎉🎉🎉🎉

I have been investing into serv and wondering if anyone else is ?

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What does work? Regression to the fucking mean. Back test it. Or use someone else’s back test, it has been done hundreds of times and been consistently shown to be the strategy that provides the most durable edge.

I have traded numerous broken pairs that eventually mean corrected and made me lots of money. Some were guilty of literal crimes (Koninklijke Philips and Medical Properties Trust) and some were just boring large caps (KO and then a year ago PEP).

Some guy coming on here with squiggly lines saying a stock is going to crater should be viewed exactly the same as someone coming on and saying “the stock is going to the moon! Gonna go to 420.69 because a bird shit on my shoulder!”

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