SMCI · Forward model · OEM Appliance & Large Data Center · Bull case
What has to happen in OEM Appliance & Large Data Center
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OEM Appliance & Large Data Center
Basis quarter$5.50B
Final quarter$20.67B
Implied CAGR+30%
Final revenue mix51%
The AI factory business: hyperscalers, neoclouds, sovereign programmes and the very large private AI builds, buying liquid-cooled GPU racks by the row. It is where the growth is and where the concentration risk is — a single customer was 28% of FY2026 revenue, and nine customers each spent over $1 billion. What limits it is not demand but how many racks can be allocated, built and energised in a quarter.
Last four quarters
2026 Q1
$3.85B
Estimated
2026 Q2
$9.74B
Estimated
2026 Q3
$7.86B
Estimated
2026 Q4
$5.50B
Reported
Liquid-cooled GPU SuperClusters sold as complete racksAir-cooled GPU servers for large data centresDCBBS: cooling, power shelves, networking and deployment services sold with the computeOEM appliance business
Units
2000/qtr
growing +21.0% per quarter
About 2,000 rack-equivalents in the basis quarter — $5.5B at an assumed $2.75M a rack. Volumes are not disclosed.
Price per unit
$3M
drifting +1.0% per quarter
$2.75M a rack, an NVL-class liquid-cooled rack. This is the assumption doing the most work; argue with it first.
OEM Appliance & Large Data Center
Latest: $20.67B (2031Q4E)
| Period | Value |
|---|---|
| 2026Q1 | $3.85B |
| 2026Q2 | $9.74B |
| 2026Q3 | $7.86B |
| 2026Q4 | $5.50B |
| 2027Q1E | $6.82B |
| 2027Q2E | $8.44B |
| 2027Q3E | $10.41B |
| 2027Q4E | $12.81B |
| 2028Q1E | $15.74B |
| 2028Q2E | $18.46B |
| 2028Q3E | $18.69B |
| 2028Q4E | $18.90B |
| 2029Q1E | $19.10B |
| 2029Q2E | $19.28B |
| 2029Q3E | $19.45B |
| 2029Q4E | $19.61B |
| 2030Q1E | $19.77B |
| 2030Q2E | $19.91B |
| 2030Q3E | $20.05B |
| 2030Q4E | $20.18B |
| 2031Q1E | $20.31B |
| 2031Q2E | $20.43B |
| 2031Q3E | $20.55B |
| 2031Q4E | $20.67B |
Assumptions & reasoning
- Modelled on units rather than growth because the binding constraint is physical and publicly stated: Super Micro puts global manufacturing capacity at 5,000 racks a month, of which 2,000 are direct-liquid-cooled. The ceiling here is the DLC figure — 6,000 a quarter — not the headline one, because liquid cooling is what an AI factory buys and it is the narrower constraint. Even that is generous: what actually rations output is GPU allocation and the customer's power and networking readiness, which is the reason management gave for the fiscal Q3 2026 revenue miss — customers not ready, not factories full.
- The rack count is NOT disclosed. It is backed out of the reported $5.5B at an assumed $2.75M per rack, so treat the level as a calibration and argue with the price instead. If a rack is really $2.0M the volume is 2,750 and the ceiling binds sooner; if it is $3.5M the volume is 1,570 and it binds later. The revenue path barely moves either way, which is the point of splitting price from volume rather than hiding both in a growth rate.
- Margin falls rather than rises in the base case, and that is a deliberate disagreement with management. The basis quarter carried a 17.5% gross margin against 10.8% for FY2026 as a whole, on what the company itself described as a favourable customer and product mix. Taking the peak quarter as the new normal would flatter every projected year. The DCBBS thesis — that selling cooling, power, networking and services with the compute lifts margin structurally — is real and is what the Bull case pays for; it is not what the base case assumes.
- This vertical carries the concentration risk for the whole model. One customer was 28% of FY2026 revenue and is widely linked to the xAI/SpaceX Colossus build. Nine customers were each above $1 billion. There is no diversification inside this line to fall back on: if the largest programme pauses, roughly a fifth of company revenue pauses with it, which is what the Concentration case tests.