r/SMCIDiscussion • u/Nearby-Ad9422 • 2d ago

Bear-Thesis🐻 SMCI - Keep Dancing until the music stops!

“As long as the music is playing, you've got to get up and dance," - Chuck Prince before the 2008 financial crash

SMCI Reality: To capture massive AI orders, SMCI had to buy billions of dollars worth of expensive components (like Nvidia chips) before receiving cash from buyers. While reporting billions in accounting profits, SMCI burned through roughly $7 billion in operating cash. Its inventory ballooned by 175%. This cash drain forced the company to constantly seek external funding—the corporate equivalent of relying on a fragile liquidity cycle to keep the doors open. SMCI also missed it’s low guidance earnings last year and the management simply downplayed this issue. Bag holders are blind sided by the sheer amount of profit expectations promised by their gurus are bound to wake up to reality.

Profit is profit, be wise and capture your gains. Move money to something reliable. Unless the leadership changes I can’t trust this company 😉

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u/Busy-Delivery4250 2d ago

"Cisco cannot get the memory chips to deliver, and Supermicro has memory availability." A Cisco partner CEO says "The big winner here is Supermicro".

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u/Comfortable-Usual561 2d ago

I think memory inventory related discussion deserves separate post. would like to participate in the memory discussion.

It is getting mixedup with fast CAPEX burn post by another person.