Super Micro Computer: The Hidden Winner of Soaring Copper Tariffs

Key Points

• As copper prices spike on a new tariff implementation, data centers and AI development will need to look for efficiency measures soon.
• Super Micro Computer is best positioned to deliver on this demand and bottleneck, which is why the stock has been up recently.
• Wall Street analysts expect a significant jump in EPS moving forward into the end of the year.

The latest round of tariff implementations from the United States has landed on metals, this time centered on copper. As a reaction to a 50% tariff on copper trade with the United States, the open market price of the metal shot up by over 10% in a single day. Judging by how much demand there will be for it in the future, this theme may only be the beginning of a longer-term increase.

Any developing economy needs copper for housing and infrastructure, and even developed nations like the United States will always have a continuing need for this commodity, especially as the market share of electric vehicles (EVs) grows larger. However, there is one quiet boom happening right now in the technology sector that will likely push copper prices to heights not seen before.

The rise of artificial intelligence and the data center infrastructure behind it will be the culprit of copper demand moving forward, since all of this expansion and electricity demand will likely be realized by market forces and reflected in market prices. This is precisely where Super Micro Computer Inc. NASDAQ: SMCI comes into play as an aid to this change in prices.

Why More Expensive Copper Boosts SMCI Stock

During the week of the copper tariffs announcement, shares of Super Micro Computer stock rose by up to 4.3%, which is on top of the broader 18% rally investors rode during the past month alone. The reason for this bullish reaction may not be so simple to the untrained investor, which is where this information becomes more valuable.

As copper prices go up, the cost of building and implementing new data center locations for artificial intelligence development also goes up. This means that the market forces will likely shift to a focus on efficiency rather than quantity, and capacity cost efficiency can only be achieved by doing more with what’s already built today.

To increase efficiency and avoid the need to expand networks as rapidly as in recent months, operators must reduce the load in current data centers in terms of heat and wiring. No player like Super Micro Computer in the market offers both of these solutions, and that’s why the stock is reacting the way it is.

With its new liquid-cooling technology for data centers and artificial intelligence infrastructure, Super Micro Computer stands to fix the immediate issue that most companies are now facing as the price of copper rises and is likely set to continue higher.

Super Micro Computer’s Positioning in the Market

Every bit of success that investors see in stocks like NVIDIA Co. NASDAQ: NVDA and other semiconductor names will directly translate into a need to keep pushing out more data center infrastructure. Not only that, the growth of cloud computing in names like Amazon.com Inc. NASDAQ: AMZN is also a major tailwind that’s here to stay.

With this in mind, the most vital players in the American technology market will feel the need to become more efficient, as brute force expansion is now the costliest it has ever been. That is exactly why Super Micro Computer has become the premium name in its peer group.

Wall Street analysts expect Super Micro Computer to deliver up to $0.74 in earnings per share (EPS) for the fourth quarter of 2025, and these forecasts likely haven’t priced in the potential demand boost that may come from higher copper prices. More than that, it seems that the market hasn’t realized this outcome yet.

Those worried about whether they missed the boat on Super Micro Computer’s rally can lean on the fact that the stock still trades at a discount. A price-to-earnings (P/E) ratio of only 26.4x would place this stock below the computer sector’s average valuation of 37.3x, and that says a lot.

This discount indicates that the market remains focused on the major players in the space, prioritizing how higher copper prices may initially impact them. Smart investors, however, could gain an edge by extrapolating these effects and see how Super Micro Computer may benefit way ahead of the broader market, realizing this fact.

Short sellers know, though, as up to 8.1% of Super Micro Computer’s short interest has declined over the past month, a clear sign of bearish capitulation. On the other hand, over $500 million in institutional buying activity has come into the stock across the past two quarters, showing investors the anticipation by “smart money” of some catalyst to come.

That catalyst is now here, and seeing Super Micro Computer stock trade at only 50% of its 52-week high gives investors ample room to see the company reclaim its previous highs, if not make a new high altogether. This asymmetric setup shouldn’t be ignored in this new industry change.