Does Super Micro's Big Quarter Make Nvidia Stock a Buy?

Super Micro Computer (NASDAQ:SMCI) had a far bigger quarter than it expected. On Tuesday, the server builder said revenue for the first quarter of its fiscal 2027 (the period ended Sept. 30) should fall between $18.5 billion and $19.5 billion. In August, management had called for $14.5 billion to $15.5 billion.

At the midpoint of each range, the company's estimate was around $4 billion over what it expected. Super Micro said the gap was "primarily due to increased demand for AI platforms," and its shares popped about 9% on Wednesday as I write.

For many investors, though, the more important stock here is Nvidia (NASDAQ:NVDA). Trading near $220 as I write this, the artificial intelligence (AI) chip leader is about 8% under $239.24, its record close, set on Oct. 6.

But does a server maker's surprise quarter make Nvidia stock a buy? I think it adds to a case that was already strong.

Image source: Getty Images.

Super Micro builds on Nvidia

Super Micro builds the servers and full racks that AI data centers run on. Its annual report for fiscal 2026 (the year ended June 30) puts Nvidia's Blackwell and Blackwell Ultra platforms first in its AI lineup.

It also says it expanded rack-scale manufacturing for Vera Rubin, Nvidia's next platform. And last November, Super Micro said its order book had over $13 billion in Blackwell Ultra orders.

Sure, Super Micro also sells systems built on rival chips, and it doesn't break out how much of its revenue runs on Nvidia hardware. Yet Nvidia's Blackwell systems seem to be what Super Micro leads with in AI.

Showing how fast that business has grown, the midpoint of Super Micro's new range (around $19 billion) is almost four times the $5.0 billion in revenue it posted in the year-ago quarter. It's also up around 71% from the $11.1 billion it reported in fiscal Q4 -- a quarter when sales almost doubled year over year.

The company now expects a gross margin (gross profit as a share of revenue) of 12% to 12.5%, over its 10.4% to 10.8% outlook and up from 9.3% the year before. It credited customer and product mix.

Keep in mind: these are preliminary, unaudited numbers. Super Micro will release its full results on Nov. 3.

What does it say about Nvidia's quarter?

Nvidia's fiscal third quarter started July 27, so August and September fall in both companies' quarters.

For that period, Nvidia expects revenue of $108.0 billion, plus or minus 2%. Super Micro's figures suggest that, through September, demand for AI systems was far ahead of what one of Nvidia's big system builders forecast in August.

Nvidia also has a recent pattern of beating its own outlook, and by a growing amount. For fiscal Q1 (the three months ending April 26), it guided for $78.0 billion and posted $81.6 billion. For fiscal Q2, it guided for $91.0 billion and pulled in $96.2 billion. In other words, the gap between its outlook midpoint and its actual revenue rose from around $3.6 billion to about $5.2 billion.

True, one server maker's quarter can't settle Nvidia's results. Nvidia sells to many builders and cloud providers. And Super Micro's 10-K said limited GPU availability changed the timing of some of its deliveries in fiscal 2026, so part of this jump may be delayed shipments catching up.

Still, I'd say it makes Nvidia's $108 billion forecast look easier to hit.

The stock isn't priced for this growth

After all, Nvidia's own results already show the demand. Data center revenue, which includes its AI chips and systems, climbed 117% year over year to $89.0 billion in fiscal Q2, accelerating from 92% growth in fiscal Q1. And on Wednesday, when Nvidia announced plans with a group of suppliers to boost manufacturing capacity, CEO Jensen Huang said, "Demand is extraordinary. Capacity is the constraint."

But the stock, around $220, costs about 14 times the earnings analysts, on average, expect Nvidia to report in fiscal 2028 (the 12 months ending January 2028). For a company whose sales just more than doubled, that price-to-earnings ratio suggests investors expect its growth to fade fast.

That may happen if the largest AI spenders pull back, and Nvidia's stock might fall quickly with them.

So, does Super Micro's quarter make Nvidia stock a buy? A server maker's beat isn't a reason to own any stock by itself. But it lines up with what Nvidia's own numbers already show.

I think Nvidia stock is worth buying at about $220. Super Micro's quarter just gives me a bit more confidence in that view.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.