Latest news with #SMCI
Business Insider
2 days ago
- Business
- Business Insider
Super Micro Computer Stock (SMCI) Bulls Eye $100 Price Target
Super Micro Computer (SMCI) has posted an eye-popping 1,677% return over the past five years, yet the stock now sits 57% below its 2024 peak of around $114. Its meteoric rise is being fueled by the AI boom, with its high-performance servers perfectly positioned to meet surging demand. Lately, though, investor sentiment has cooled due to accounting concerns and tightening margins. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Even so, SMCI's strong growth outlook and attractive valuation point to a potential rebound. If the company can navigate near-term challenges, a return to previous highs remains well within reach. Fueling the Surge: The AI Boom Over the past five years, SMCI has ridden the trend of artificial intelligence and data center expansion with its customizable, high-efficiency servers becoming critical for enterprises and hyperscalers scaling AI infrastructure. To quantify this trend, note that from 2020 to 2024, SMCI's revenue soared from $3.34 billion to $15 billion, with a 110.42% year-over-year leap in 2024 alone, driven by partnerships with NVIDIA (NVDA) and AMD (AMD). In the meantime, its U.S.-based manufacturing and leadership in liquid-cooling technology have further solidified its edge, meeting the market's push for sustainable, high-performance solutions. Wall Street has grown increasingly bullish on SMCI, thanks to its ability to deliver modular, scalable systems that have made it a top choice for cloud providers and AI-focused companies. Its inclusion in the NASDAQ 100 in 2023 further elevated its profile and fueled investor optimism. That momentum hasn't faded. With the global data center market projected to hit $528 billion this year and grow at a high-single-digit pace through the decade, SMCI stands to benefit significantly. Its innovative product lineup positions it well to capture a sizable share of this expanding market. SMCI Arrests Stock Market Slide Despite the strong long-term themes supporting SMCI and a solid base of bullish investors, the stock has faced serious headwinds since reaching its 2024 peak. A critical report last year resurfaced concerns over accounting practices, echoing a 2018 SEC probe that resulted in fines and a temporary NASDAQ delisting. The fallout was swift: shares plunged nearly 85% at their lowest point. Investor confidence was further rattled by a delayed 10-K filing, raising fears of another potential delisting, while ongoing investigations by the DOJ and SEC cast an even darker cloud. The effect on SMCI's share price has been significant. As TipRanks data shows, SMCI's performance against the broader S&P 500 (SPX) benchmark has been lackluster to say the least. SMCI has lagged the S&P by over 40%. Operational challenges have added to the pressure. SMCI's most recent quarterly results fell short of expectations, with revenue coming in at $4.6 billion versus a forecasted $5 billion. Adjusted EPS dropped to $0.31 from $0.66 a year earlier, hit by inventory write-downs on older-generation GPUs and customer delays tied to the transition to NVIDIA's Blackwell architecture. Gross margins shrank to 9.7%, down 220 basis point s from the previous quarter, due to rising costs and a mix shift toward lower-margin hyperscale contracts. Meanwhile, a $2 billion convertible note offering raised dilution concerns, further weighing on sentiment. Robust Growth Prospects: A Bright Horizon Despite recent setbacks, SMCI has now addressed its accounting concerns, and its long-term growth outlook remains firmly intact, driven by the ongoing surge in AI infrastructure demand. Even with last quarter's top-line miss, revenue still climbed 19% year-over-year, with AI GPU platforms making up over 70% of total sales—a clear sign of strong adoption among enterprise clients and cloud providers. CEO Charles Liang emphasized SMCI's first-mover advantage with next-gen GPU platforms and its Datacenter Building Block Solutions (DCBBS), which are expected to power growth as customers transition to technologies like NVIDIA's Blackwell architecture starting in Q4 2025. The company is also expanding aggressively, building out facilities in Malaysia, Taiwan, and Europe to keep pace with global demand. Its upcoming DLC-2 liquid-cooling solution and strategic partnerships with NVIDIA and Ericsson on edge AI infrastructure further strengthen its competitive position in the $367 billion data center market. Reflecting this momentum, management is guiding for Q4 2025 revenue between $5.6 billion and $6.4 billion, with adjusted EPS of $0.40 to $0.50, signaling confidence in both margin recovery and production scale-up. A Bargain with Upside Potential At today's share price, SMCI trades at 23x this year's expected EPS of $2.08, a compelling multiple given its growth trajectory. At the same time, analysts forecast EPS growth of 34% in 2026 and 28% in 2027, which is to be driven by AI demand and improving supply chains. So SMCI's forward P/Es quickly fall to mid-teens below $50 per share, which means that as SMCI achieves these targets, investors are likely to chase the stock higher. So yes, risks remain, including rising competition and potential tariff impacts. Still, the broader AI and data center trends remain powerful tailwinds, with SMCI's leadership in high-efficiency servers and cooling systems aligning with market demand. Is SMCI Stock a Good Buy? Analyst sentiment on SMCI is currently mixed, reflecting a divide between those who view it as a value opportunity and those who remain cautious. The stock holds a Moderate Buy consensus, based on six Buy, six Hold, and two Sell ratings issued over the past three months. Notably, SMCI's average 12-month price target stands at $42.67, implying about 13% downside from current levels. This suggests that, unlike my more optimistic outlook, Wall Street isn't yet convinced the stock is on track to reclaim its previous highs. SMCI Set for Rebound as Wall Street Remains Unconvinced Despite recent volatility, SMCI continues to play a vital role in the AI infrastructure landscape, backed by strong fundamentals, accelerating demand, and an attractive valuation. Its leadership in next-generation server and cooling technologies, expanding global presence, and strategic partnerships position the company well for long-term growth. Now that its accounting concerns are resolved and margin pressures appear set to ease, SMCI looks poised to regain lost ground. While Wall Street's conviction in the stock remains lukewarm for now, the underlying story suggests meaningful upside for those willing to look past the near-term noise.
Yahoo
2 days ago
- Business
- Yahoo
Super Micro Computer Rides on DLC Momentum: What Lies on the Horizon?
Super Micro Computer's SMCI direct liquid cooling (DLC) technology is in high demand among hyperscalers and AI data centers as the liquid cooling technology reduces heat more effectively than its air cooling counterparts. DLC also commands efficient power usage, which enables it to handle higher computational densities and lowering total cost of ownership. SMCI's DLC is driving its server and storage system segment, which grew 20.5% year over year in the third quarter of fiscal 2025. Notably, Super Micro Computer's direct liquid cooling products for data-center applications crossed the production volume of 2000 DLC racks per month. Now the company has introduced DLC-2, which not only reduces electricity consumption by 40% but also lowers the cost of water and space while decreasing noise. SMCI's success with liquid cooling technology is evident in the strong traction in 4U NVIDIA B200 HGX systems and GB200 NVL72 racks as reported in the third quarter of fiscal 2025. SMCI's newest technology, its direct liquid cooling data center building blocks (DCBBS), enables data centers to develop modular, rack-scale and plug-and-play architecture. The DCBBS technology utilizes DLC-2 to optimize thermal performance. The rising adoption of SMCI's DLC offerings has prompted it to announce a revenue guidance of $21.8-$22.6 billion for fiscal 2025. The Zacks Consensus Estimate for SMCI's fiscal 2025 revenues is pegged at $22.12 billion, indicating growth of 48% year over year. Vertiv VRT has a strong thermal management portfolio covering coolant distribution units, chillers, rear-door heat exchangers, and immersion cooling systems to optimize performance, power utilization, control, and heat re-use. VRT is expanding its storage and server cooling expertise organically and inorganically. Vertiv is working closely with NVIDIA to offer cooling systems to AI factories and has previously deepened its portfolio with the Cooltera acquisition. Dell Technologies' DELL liquid cooling architectures consist of its Apex and PowerEdge platforms designed for AI server solutions. DELL's cooling solutions are modular, customizable and allow the integration of both air and liquid cooling features with 24-hour rack deployment turnaround and end-to-end deployment services. These key differentiators make Dell Technologies' server easy to deploy, hence encouraging smoother adoption. Shares of SMCI have surged 61.6% year to date against the Zacks Computer- Storage Devices industry's decline of 9.2% Image Source: Zacks Investment Research From a valuation standpoint, SMCI trades at a forward price-to-sales ratio of 0.98X, lower than the industry's average of 1.45X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for SMCI's fiscal 2025 earnings implies a year-over-year decline of 6.33% while the 2026 earnings estimate implies growth of 26.33%. The estimates for fiscal 2025 and 2026 have been revised downward in the past 90 days and seven days, respectively. Image Source: Zacks Investment Research SMCI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dell Technologies Inc. (DELL) : Free Stock Analysis Report Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report Vertiv Holdings Co. (VRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
3 days ago
- Business
- Globe and Mail
Super Micro Computer Rides on DLC Momentum: What Lies on the Horizon?
Super Micro Computer 's SMCI direct liquid cooling (DLC) technology is in high demand among hyperscalers and AI data centers as the liquid cooling technology reduces heat more effectively than its air cooling counterparts. DLC also commands efficient power usage, which enables it to handle higher computational densities and lowering total cost of ownership. SMCI's DLC is driving its server and storage system segment, which grew 20.5% year over year in the third quarter of fiscal 2025. Notably, Super Micro Computer's direct liquid cooling products for data-center applications crossed the production volume of 2000 DLC racks per month. Now the company has introduced DLC-2, which not only reduces electricity consumption by 40% but also lowers the cost of water and space while decreasing noise. SMCI's success with liquid cooling technology is evident in the strong traction in 4U NVIDIA B200 HGX systems and GB200 NVL72 racks as reported in the third quarter of fiscal 2025. SMCI's newest technology, its direct liquid cooling data center building blocks (DCBBS), enables data centers to develop modular, rack-scale and plug-and-play architecture. The DCBBS technology utilizes DLC-2 to optimize thermal performance. The rising adoption of SMCI's DLC offerings has prompted it to announce a revenue guidance of $21.8-$22.6 billion for fiscal 2025. The Zacks Consensus Estimate for SMCI's fiscal 2025 revenues is pegged at $22.12 billion, indicating growth of 48% year over year. How Competitors Fare Against SMCI Vertiv VRT has a strong thermal management portfolio covering coolant distribution units, chillers, rear-door heat exchangers, and immersion cooling systems to optimize performance, power utilization, control, and heat re-use. VRT is expanding its storage and server cooling expertise organically and inorganically. Vertiv is working closely with NVIDIA to offer cooling systems to AI factories and has previously deepened its portfolio with the Cooltera acquisition. Dell Technologies ' DELL liquid cooling architectures consist of its Apex and PowerEdge platforms designed for AI server solutions. DELL's cooling solutions are modular, customizable and allow the integration of both air and liquid cooling features with 24-hour rack deployment turnaround and end-to-end deployment services. These key differentiators make Dell Technologies' server easy to deploy, hence encouraging smoother adoption. SMCI's Price Performance, Valuation and Estimates Shares of SMCI have surged 61.6% year to date against the Zacks Computer- Storage Devices industry's decline of 9.2% SMCI YTD Performance Chart From a valuation standpoint, SMCI trades at a forward price-to-sales ratio of 0.98X, lower than the industry's average of 1.45X. SMCI Forward 12 Months (P/S) Valuation Chart The Zacks Consensus Estimate for SMCI's fiscal 2025 earnings implies a year-over-year decline of 6.33% while the 2026 earnings estimate implies growth of 26.33%. The estimates for fiscal 2025 and 2026 have been revised downward in the past 90 days and seven days, respectively. SMCI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. 5 Stocks Set to Double Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include Stock #1: A Disruptive Force with Notable Growth and Resilience Stock #2: Bullish Signs Signaling to Buy the Dip Stock #3: One of the Most Compelling Investments in the Market Stock #4: Leader In a Red-Hot Industry Poised for Growth Stock #5: Modern Omni-Channel Platform Coiled to Spring Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%. Download Atomic Opportunity: Nuclear Energy's Comeback free today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Dell Technologies Inc. (DELL): Free Stock Analysis Report Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report Vertiv Holdings Co. (VRT): Free Stock Analysis Report
Business Insider
5 days ago
- Business
- Business Insider
Super Micro Stock (SMCI) Gets Price Target Hike from Citi's Top Analyst Ahead of Q4 Earnings
Super Micro Computer (SMCI), a provider of servers and IT systems, is set to announce its Q4 FY25 earnings in early August. Wall Street expects the company to report EPS of $0.44 on revenue of $5.96 billion in Q4. Ahead of the results, Asiya Merchant, a 5-star analyst at Citi, raised her price target on the stock to $52, up from $37. While she maintained a Neutral rating, Merchant believes stronger demand for AI servers and easing supply constraints could support growth in the coming quarters. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Merchant ranks 280 out of more than 9,800 analysts on TipRanks. She has a success rate of 75%, with an average return per rating of 26.80% over a one-year period. Analyst Sees AI Growth Ahead, But Margin Concerns Linger Merchant, a Top-rated analyst, sees growing demand in the AI space, especially from large companies and government customers. She noted that Super Micro is beginning to benefit from the ramp-up of Nvidia's (NVDA) GB200 and GB300 platforms, which started shipping in May. She added that Super Micro's management sounds hopeful about turning current deals into real orders over the next two quarters. As Blackwell GPU supply improves, she believes the company will find it easier to deliver products and grow its sales. Still, the analyst remains cautious. She warned that profit growth could slow, as larger rivals like Dell (DELL) and Hewlett Packard Enterprise (HPE) are stepping up competition in the same space. This added pressure could make it harder for Super Micro to grow its margins, even if sales continue to rise. Higher Price Target Reflects AI Buzz Merchant raised her price target to $52 based on a higher earnings multiple of 13.5x FY2027 estimates, compared to her earlier range of 9–10x. She said the move reflects stronger valuations across AI-related stocks and an overall lift in the market. However, the analyst kept her Neutral rating, citing fair valuation and margin pressure ahead of Q4 earnings. Is SMCI Stock a Buy? Super Micro Computer stock has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on six Buy, six Hold, and two Sell recommendations issued in the last three months. The average SMCI price target of $40.92 implies 18.75% downside from current levels.
Business Insider
5 days ago
- Business
- Business Insider
Super Micro Computer Stock (SMCI) Gets an Upgrade as AI Trade Reignites
The stock of Super Micro Computer (SMCI) has received an upgrade as the trade in artificial intelligence (AI) companies reignites and investors pile back into technology names. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week. Analysts at Citigroup (C) hiked their price target on SMCI stock to $52 from $37, citing improving demand for the company's AI servers and the ramp-up of Nvidia's (NVDA) newest processors that run on Super Micro Computer's servers. However, despite raising its price target, Citigroup maintained a Hold-equivalent neutral rating on SMCI stock, pointing to increasing competition from the likes of Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE). 'We remain concerned on margins given increased momentum and competitive efforts by DELL and HPE, which we believe will temper margin expansion expectations.' Earnings Outlook Super Micro Computer is expected to report Fiscal fourth-quarter financial results in early August. Citigroup forecasts revenue of $6.07 billion, up 13% year-over-year and 32% quarter-over-quarter, and earnings per share of $0.45, roughly in line with consensus estimates on Wall Street. SMCI stock has been volatile over the past year as the company has dealt with an accounting scandal, potential delisting from the Nasdaq exchange on which it trades, and rising competition in the market for AI servers. So far in 2025, Super Micro Computer's stock has risen 63%. Is SMCI Stock a Buy? The stock of Super Micro Computer has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on six Buy, six Hold, and two Sell recommendations issued in the last three months. The average SMCI price target of $40.92 implies 17.70% downside from current levels.
