SMCI has turned sharply higher this week — up 21% to $37.10 — and that surge has arrived alongside the most defensive options print of the past year, creating a tension that runs through every layer of the current setup.
The options signal is striking precisely because it contradicts the price action. The put/call ratio jumped to 0.89 on Tuesday, nearly three standard deviations above its 20-day average of 0.78 and the highest reading in the past 52 weeks — just edging above the 0.89 peak recorded on April 30. That prior-week note described the post-earnings short cover stalling and options traders flipping defensive; this week the stock has ripped higher, yet the hedging demand has not unwound. Instead it has intensified. The previous article flagged the put/call at 0.92 as the most defensive reading of the year — the current 0.89 is fractionally below that, but the pattern is consistent: traders are buying upside exposure with one hand and downside protection with the other.
Short interest is moving in the right direction for the bulls, but it has not broken meaningfully. SI now runs at 12.7% of the free float, down from 13.0% a week ago and well below the ~87 million shares outstanding short that defined the early-May peak. The month-on-month decline is nearly 5%. Crucially, the borrow market is not generating any squeeze pressure. Cost to borrow is just 0.36% — near its lowest level of the past 30 days and down 17% on the month. Availability is comfortable at 207%, meaning roughly two shares are available in the lending pool for every one already borrowed. The shorts still in the position are not being forced out; those who have covered did so by choice.
The Street's reaction to the May 5 earnings print was broad but split in direction. Most firms raised targets after the quarter — Mizuho moved from $30 to $36, JP Morgan from $28 to $32, Citigroup from $25 to $31, and Rosenblatt to $40 — yet the consensus has not shifted off Hold. The analyst target of $36.75 now trails the current price of $37.10, meaning the stock has moved through consensus in this week's rally alone. That's a notable signal: a 21% week has effectively exhausted the median analyst's bull case. Factor scores add nuance here. The analyst recommendation divergence score ranks in the 93rd percentile, meaning the distribution of views is unusually wide — a small number of bulls (Rosenblatt and Needham both hold $40 Buy targets) pulling hard against a bloc of Neutrals. The EV/EBIT factor ranks in the 76th percentile, suggesting valuation is not stretched on an earnings-power basis, though the P/E multiple has expanded by roughly 1.8 turns over the past month as the stock has re-rated.
Institutional ownership shows a founder-heavy base anchoring the register. Charles Liang holds 8.9% and has not changed his position. BlackRock added 1.7 million shares in the most recent reported period, and UBS Asset Management added nearly 5 million. Insider activity in May was routine — a round of RSU awards and small plan-driven sales totalling under $120k in net proceeds, all at around $35.37. The 90-day net is marginally positive at roughly $432k but carries no directional signal given the size.
DELL is the most useful peer reference point this week. It rallied 28% over the same period, broadly tracking SMCI's move and confirming this is a sector-wide re-rating rather than a company-specific catalyst. The next concrete event on the calendar is the Q4 earnings release on August 4. With the stock now sitting above the analyst consensus target and the put/call ratio near a 52-week defensive extreme despite the rally, the gap between price momentum and options-market caution is the central tension to watch into that print.
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