This article first appeared on GuruFocus .

Super Micro Computer Inc. ( SMCI , Financials ) is not lacking demand. The AI server division recorded $39.1 billion in sales in fiscal 2026, up from $22 billion a year earlier, and set a record backlog at the start of the next fiscal year after securing more than $60 billion in new orders.Now the tough part: translating all that growth into more consistent earnings. Supermicro's full year gross margin was marginally lower at 10.8% versus 11.1%, a small decline that is more significant when sales is growing this quickly.The latest quarter was, nevertheless, rather encouraging. Fourth quarter revenue was more than $11.1 billion and adjusted earnings of $1.70 per share. Gross margin increased to 17.5%It gives investors something to look at. Supermicro is forecasting revenues between $65 billion and $72 billion in fiscal 2027. At that size, even a small margin rise can result into a big profit increase.But the opposite is true Aggressive pricing and client mix will continue to squeeze profitability, which is less of an issue if AI-server growth is high. And that's why the stock is a different bet than simply holding greater demand for AI infrastructure.Supermicro has proven that it can sell the servers. The next hurdle is to prove it can make more money from each one. Its next catalyst will be its fiscal first quarter earnings when investors will evaluate whether the fourth quarter margin rebound was the beginning of a pattern or merely a strong quarter.