AITSE:4388 +1.08%77 Gross Margin % is 54.33% as of Mar. 2026, which is 29% below its 10-year median of 76.63. GuruFocus rates TSE:4388 with a GF Score™ of 77/100 and a GF Value™ of 円1,085.67 (Significantly Undervalued). The stock has 5 warning signs investors should review. Among 2,457 Hardware companies, AI ranks better than 89.34% on this metric.
Gross Margin % is calculated as gross profit divided by its revenue. AI's Gross Profit for the
six
months ended in Mar. 2026 was 円565 Mil. AI's Revenue for the
six
months ended in Mar. 2026 was 円1,040 Mil. Therefore, AI's Gross Margin % for the quarter that ended in Mar. 2026 was 54.33%.
Warning Sign:
AI Inc gross margin has been in long-term decline. The average rate of decline per year is -10.2%.
The historical rank and industry rank for AI's Gross Margin % or its related term are showing as below:
TSE:4388'
s Gross Margin % Range Over the Past 10 Years
Min: 50.42 Med: 76.63 Max: 83.97
Current: 52.74
During the past 11 years, the highestGross Margin % of AI was 83.97%. The lowest was 50.42%. And the median was 76.63%.
TSE:4388's Gross Margin % is ranked better than 89.34% of 2457
companies
in the Hardware industry
Industry Median: 24.54
vs TSE:4388: 52.74
AI had a gross margin of 54.33% for the quarter that ended in Mar. 2026 => Durable competitive advantage
The 5-Year average Growth Rate of Gross Margin for AI was -10.20% per year.
AI (TSE:4388) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
AI had a gross margin of 54.33% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
AI Gross Margin % Related Terms
AI Gross Margin % Historical Data
* Premium members only.
The historical data trend for AI's Gross Margin % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
TSE:4388 vs CSCO, CIEN, MSI: Gross Margin % Comparison
For the Communication Equipment subindustry, AI's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
AI Gross Margin % vs Hardware Industry
For the Hardware industry and Technology sector, AI's Gross Margin % distribution charts can be found below:
* The bar in red indicates where AI's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
AI (TSE:4388) has a Gross Margin % of 54.33% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on AI and its competitors. This is 29% below median its historical median of 76.63. Over the past decade, AI's Gross Margin % has ranged from 50.42 to 83.97. According to the industry distribution chart, AI ranks #262 out of 2457 companies in the Hardware industry, placing it in the top 10.7%.
Is AI's Gross Margin % too high?
AI's current Gross Margin % of 54.33% is 29% below median its 10-year median of 76.63. Over the past 10 years, this metric has ranged from a low of 50.42 to a high of 83.97. The Hardware industry median Gross Margin % is 24.54. AI's value of 54.33% is 121.4% above this industry median. Based on the distribution chart, AI ranks #262 out of 2457 companies in the Hardware industry, which is in the top quartile — a strong position relative to peers. Overall, AI has a GF Score™ of 77/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does AI's Gross Margin % compare to CSCO and CIEN?
According to the Hardware industry distribution chart, AI ranks #262 out of 2457 companies for Gross Margin %. This places AI in the top 11% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 24.54. AI's value of 54.33% is 121.4% above this benchmark. Historically, AI's own Gross Margin % has ranged from 50.42 to 83.97 over the past decade. While the company's 10-year median is 76.63 vs. the industry median of 24.54, AI has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Hardware company?
The median Gross Margin % among Hardware companies is 24.54, based on 2,457 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. AI's current Gross Margin % of 54.33% is 121.4% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on AI and its competitors. For the Hardware industry, the median Gross Margin % is 24.54 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. AI's current Gross Margin % is 54.33%, which is 29% below median its own 10-year median of 76.63. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is AI stock overvalued right now?
Based on GuruFocus' analysis, AI (TSE:4388) is currently considered Significantly Undervalued. The stock's GF Value™ is 円1,085.67, compared to a current price of 円376.00 — trading 65.4% below its estimated fair value. The current Gross Margin % is 54.33%, which is 29% below median its 10-year median of 76.63 and 121.4% above the Hardware industry median of 24.54. AI's overall GF Score™ is 77/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For AI (TSE:4388), the current Gross Margin % is 54.33% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is AI (TSE:4388) Overvalued in 2026?
Based on GuruFocus' analysis, AI stock appears to be undervalued.
The current stock price of 円376.00 is trading 65.4% below its estimated GF Value™ of 円1,085.67.
GuruFocus considers AI to be Significantly Undervalued.
Key valuation signals for TSE:4388:
Gross Margin %: 54.33% (29% below median its 10-year median of 76.63)
GF Value™: 円1,085.67 vs. price of 円376.00 (65.4% below fair value)
Industry Position: 121.4% above the Hardware median (#262 of 2457)
No single metric tells the full story. See the TSE:4388 stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
AI Inc provides and develops voice synthesis systems and consults related business services in Japan. The company provides a high-quality speech synthesis engine capable of freely synthesizing speech with more human-like natural speech, employing a corpus-based speech synthesis method that combines human voice rather than conventional machine sound. The company's product includes AlTalk, AlTalk SDK, AlTalk Server, and AlTalk Custom Voice.
77GF Score
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