SMCI Still Looks Cheap After a Major Earnings Reset

The recent pullback has changed the Sigmanomics setup considerably. In the wake of the recent pullback in SMCI stock, the model now sees a much wider range of potential movement ahead. Moreover, the short-term trend is down—while the 14- and 28-day trends have also drifted lower amid the recent market volatility. At the same time, the daily and weekly trends remain higher, supporting the fundamental outlook for the stock. 

Sigmanomics currently projects an expected move of roughly ±6.3% over seven days, ±9.6% over 14 days, and ±14.7% over 28 days. Those ranges are substantially wider than they were before the recent selloff, although the model’s conviction in the primary magnitude forecast has also fallen. None of its seven models currently sit within the primary forecast band, so the projected ranges are better viewed as a guide to potential volatility than a high-confidence directional signal.

The options market has adjusted as well. Before SMCI’s latest pullback, Sigmanomics classified 28-day options as premium rich, with a volatility risk premium reading near 1.80x. That reading has since fallen to 1.43x, while seven- and 14-day readings stand at 1.27x and 1.22x. All three maturities are now classified as fairly priced.

That does not mean volatility has disappeared. SMCI’s IV Rank has actually climbed to around 33%, and the options market is pricing in an implied move of roughly ±23.6% over 28 days. The difference is that Sigmanomics’ own estimate of likely movement has expanded substantially following the stock’s retracement. In other words, options still carry plenty of volatility, but they no longer look unusually expensive relative to the movement the model expects.

Sigmanomics

For investors who had been considering selling puts primarily because options premiums looked unusually rich, the change in Sigmanomics’ readings may warrant an adjusted approach. The volatility edge is less pronounced now, with the model rating premium as “fair” rather than “expensive.”

That said, a cash-secured put may still be appealing for bullish investors who would genuinely be comfortable owning SMCI at a lower price. 

With the shares now around $32, selling a put at a lower strike could allow an investor to collect premium while potentially establishing a position below the current market price if assigned on the option(s). In this case, the rationale is less about exploiting overpriced volatility, and more about using the option position to target a lower entry point in a stock the investor already wants to own.

Timing remains an important consideration. The 28-day window extends across Super Micro’s expected Nov. 3 earnings report, which helps keep option premiums elevated but also introduces substantial event risk. A disappointing report could send SMCI sharply lower, leaving the put seller obligated to buy shares significantly lower than where they trade today. 

Investors comfortable with that possibility might still consider a cash-secured put before the report, particularly if they would be comfortable owning SMCI at a lower price. However, those investors and traders who are primarily attracted to elevated volatility premium—or who would rather avoid earnings risk—may elect to wait until after the earnings report is released. 

For investors with a longer time horizon, the stock itself may now look more compelling after the recent pullback. Options can provide alternative ways to structure an entry, but the company’s execution will remain the primary driver of longer-term performance. And investors with a long-term time horizon might therefore prefer to buy the stock at this level, or if the stock pulls back further after earnings.