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Super Micro Computer gained 6% on the week to close at $43.46, extending a move that has now pushed the stock 10% higher over the past month, and the short community has responded by continuing to reduce exposure for the third consecutive week.
The short unwind remains the clearest trend in the data. Short interest edged down another 0.5% on the week to 92.0 million shares, or 15.4% of the free float. That figure is worth reading in context: the September 15 peak was 96.9 million shares, so roughly 5 million shares of short exposure have been removed since then, even as the stock has climbed. Borrowing costs remain near negligible at 0.49%, and borrow availability has loosened further to 295%, up from the mid-September trough of roughly 200%. There are now nearly three shares available in the lending pool for every one already borrowed. The ORTEX short score has ticked marginally lower to 58.7, continuing the drift that has been in place since late September. Taken together, the picture is one of an orderly, unforced retreat rather than a squeeze: shorts are choosing to reduce, not being pushed out.
The Street remains cautious but not hostile. Mizuho's Vijay Rakesh raised his target to $43 yesterday, keeping his Neutral rating, a move that brings the target roughly in line with the current price. That follows a cluster of target increases in mid-August, after the August 11 earnings print, when Goldman maintained its Sell rating but bumped its target to $34, while Citi, Wedbush, Barclays, and Rosenblatt all lifted targets within the same 24-hour window. The consensus sits at buy, but with only two buy ratings tracked, that headline overstates bullish conviction. The mean target of $41.87 is now fractionally below the current price, meaning most of the Street's modelled upside has been consumed. Valuation multiples have drifted higher: the price-to-book ratio has risen 0.13 points over the past 30 days, and the trailing PE has expanded by 0.63 turns. The EV/EBITDA multiple of 5.9x and PE of 8.5x remain undemanding if the company executes on its FY27 guidance of $14.5 billion to $15.5 billion in quarterly revenue. The 90-day EPS momentum factor ranks in the 95th percentile, reflecting a sharp upward revision cycle in forward estimates since the August print. The short score rank of 8, however, flags that short pressure remains elevated relative to the broader universe.
The bull and bear cases are unusually clear-cut. Bulls point to the $60 billion backlog, with management indicating roughly 70% of order flow is pure AI, and enterprise and channel revenue having grown to 50% of sales, with the company now carrying nine customers above $1 billion in annual revenue versus four a year ago. Bears flag that FQ4 revenue landed near the low end of guidance despite an unusually strong 17.6% gross margin that management has since guided back down to a normalised 10.4% to 10.8% range. A single data centre customer accounted for 28% of FY26 revenue, and the prior internal control weaknesses that triggered the 2024 accounting episode have not fully left institutional memory. Options positioning is modestly defensive: the put/call ratio of 0.80 is slightly above its 20-day average of 0.77, a z-score of 0.48, well within normal range and far below the 52-week high of 0.99 hit on September 28.
On the ownership register, CEO Charles Liang and director Sara Liu Liang each sold 100,000 shares at $40 on September 4 under pre-arranged 10b5-1 plans, adding to sales executed the day prior. The combined disposals represent roughly $15.4 million in net insider selling over the past 90 days. Because all trades were conducted under 10b5-1 plans, they reflect scheduled liquidations rather than discretionary conviction calls, and the significance scores assigned are low. Liang retains 53 million shares, or 8.1% of the company, providing ample alignment. Among institutional holders, BlackRock added 4.3 million shares in the quarter to September 30, while Vanguard entities continued to build positions. Jane Street trimmed its disclosed stake from 8.5% to 7.4% in its August 13 amendment, though as a market maker that filing reflects trading inventory rather than investment conviction.
With the next earnings event scheduled for November 3, the immediate question for this stock is whether the short retreat has legs or stalls as traders reassess the margin normalisation story in the run-up to the Q1 FY27 print.
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