Super Micro Computer Gains Momentum in AI Infrastructure Market

Raymond James says this AI-related stock is a buy with more than 20% upside

The artificial intelligence boom should boost shares of Super Micro Computer , according to Raymond James. Analyst Simon Leopold initiated coverage of the server maker with an outperform rating and set its price target at $41. That target implies 22.3% upside from Monday's close. "AI platforms now comprise nearly 70% of Super micro's revenue, and is also expanding its share of the branded AI server market. The company combines its engineering and manufacturing scale to compete," the analyst wrote in a note this week. "Tariffs and technology transitions (e.g., NVIDIA's Hopper to Blackwell processors) present intermediate-term challenges, but AI projects represent a long-term secular driver." While Super Micro recently issued disappointing preliminary results for the fiscal third quarter , it's still up sharply this year. The stock has risen about 10% in 2025, far outpacing the S & P 500. In the past six months, shares have also soared nearly 65%. SMCI 6M mountain SMCI, 6-month Those gains could extend in the near term. Dubbing Super Micro a "market leader in AI-optimized infrastructure," Leopold noted the company has claimed 9% of the AI platform market and 31% share among branded suppliers. He believes Super Micro will expand its market share. The analyst cited more growth in hyperscale AI infrastructure as a key catalyst for gains ahead. He also pointed to the ramping of Nvidia's Blackwell platforms as a catalyst, along with increased penetration of its AI deployments in other industries like finance and healthcare. "While recent lumpiness tied to product transitions and limited enterprise services constrain valuation, we believe SMCI's 25%+ revenue [compound annual growth rate] and expanding U.S. footprint support a re-rating," he wrote. To be sure, Leopold's bullish stance puts him in the minority on Wall Street. Eight of the 15 analyst covering it have a hold rating on Super Micro, per LSEG data. By contrast, five have a buy rating. Its average target of roughly $40 still calls for an advance of more than 20% in shares from here, however.

Supermicro Stock Jumps as Raymond James Kicks Off Coverage With Bullish Rating

Even with Tuesday's gains, Supermicro shares are worth half of what they were a year ago. Super Micro Computer (SMCI) shares jumped Tuesday after Raymond James initiated coverage of the server maker's stock with an "outperform" rating and $41 price target. The stock rose nearly 15% to more than $38 in recent trading, though even with Tuesday's gains, the shares have lost over half their value from a year ago. Supermicro has "emerged as a market leader in AI-optimized infrastructure," Raymond James analysts told clients. The company has 9% of the $145 billion AI platform market, which could climb, the analysts said, adding that it leads branded suppliers, according to research firm Dell'Oro. Earlier this month, several analysts cut their price targets for Super Micro after the Nvidia (NVDA) partner reduced its sales outlook, and pointed to customers delaying product decisions amid economic uncertainty. Supermicro shares have been volatile over the past few months, pressured by downward forecast revisions, disappointing results, and worries about the company's accounting practices. In February, the company narrowly avoided being delisted for delinquent financial filings.

Supermicro Soars Wednesday, Extending Gains as AI Stocks Rally

Raymond James initiated coverage of Supermicro earlier this week, calling it a "market leader in AI-optimized infrastructure." Super Micro Computer (SMCI) shares soared Wednesday, extending gains as AI stocks rallied on the heels of new Saudi partnerships announced as President Trump kicked off a four-day trip to the Middle East. Shares of Supermicro were up close to 15% in recent trading, after rising 16% Tuesday. Still, the stock has lost more than half its value over the past 12 months. Wednesday's jump comes after Supermicro late Tuesday announced a $20 billion deal with Saudi Arabian data center company DataVolt. Supermicro partners Nvidia (NVDA) and Advanced Micro Devices (AMD) also saw their shares rise after announcing deals Tuesday with Humain, an AI subsidiary of Saudi Arabia's sovereign wealth fund. Raymond James analysts initiated coverage of Supermicro earlier this week with an "outperform" rating, called Supermicro a "market leader in AI-optimized infrastructure," in a note to clients. The company has 9% of the $145 billion AI platform market, which could climb, the analysts said. Supermicro shares have been volatile over the past few months, amid concerns about its accounting practices and downward forecast revisions. In February, the company narrowly avoided being delisted for delinquent financial filings.

SMCI Rated Outperform by Raymond James Amid Dominance in Branded AI Server Market - Hewlett Packard (NYSE:HPE), Dell Technologies (NYSE:DELL)

Raymond James has initiated coverage on Super Micro Computer SMCI with an Outperform rating. This move comes in light of Supermicro's strong standing in the AI-optimized infrastructure sector and its swift revenue growth. What Happened: AI platforms constitute approximately 70% of Supermicro's revenue, positioning it as a dominant player among branded server vendors. Raymond James has set a $41 price target for the company, projecting Supermicro's FY26 revenue at $29.8 billion with an EPS of $3.03, indicating a compound annual growth rate (CAGR) of over 25%, reported Investing.com. Raymond James highlighted that Supermicro has effectively carved out a niche for itself and "positioned itself in a sweet spot" between traditional branded IT vendors such as Dell DELL, Hewlett-Packard Enterprise HPE and contract manufacturers like Quanta. The firm noted that while Supermicro has shown impressive growth, its valuation was impacted by past performance inconsistencies and internal control issues, which caused delayed SEC filings and auditor changes. These problems have since been resolved with no misconduct found. SEE ALSO: 'Trump Administration Funneling Money To Private Prison Companies' AOC Says, Calling Out Profits From ICE Detentions After Campaign Kickbacks Why It Matters: Supermicro's financial performance has been under scrutiny, especially following its Q3 results in 2025. The company reported quarterly earnings of 31 cents per share, missing the analyst consensus estimate of 50 cents by 38%. Its quarterly revenue of $4.6 billion also fell short of the analyst consensus estimate of $5.42 billion by 15.1%. Get StartedStart Futures Trading Fast -- with a $200 Bonus Join Plus500 today and get up to $200 to start trading real futures. Practice with free paper trading, then jump into live markets with lightning-fast execution, low commissions, and full regulatory protection. Get Started CEO Charles Liang said the company isn't providing fiscal 2026 guidance due to tariff-related uncertainty, noting that "economic uncertainty and tariff impacts may have a short-term impact," reported CNBC. Despite these financial setbacks, Raymond James remains optimistic about Supermicro's future, particularly due to its robust position in the AI-optimized infrastructure sector. The firm's bullish stance is further supported by Supermicro's plans to expand its U.S. manufacturing to produce 1,500 liquid-cooled AI racks per month. SMCI stock surged 16.02% to close at $38.89 on Tuesday. On a year-to-date basis, it soared over 29%. SMCI holds a momentum rating of 40.25% and a growth rating of 93.38%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock's historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. READ MORE: Charlie Munger Was Once Asked Why Warren Buffett Was So Much Richer -- He Replied, 'He Got An Earlier Start,' Then Added, 'Why Was Albert Einstein Poorer Than I Was?' - Benzinga Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. DELLDell Technologies Inc$108.570.67%Stock Score Locked: Want to See it? Benzinga Rankings give you vital metrics on any stock - anytime. Reveal Full ScoreEdge RankingsMomentum24.29Growth50.66Quality-Value38.56Price TrendShortMediumLongOverviewHPEHewlett Packard Enterprise Co$17.90-0.11%SMCISuper Micro Computer Inc$42.008.00%Market News and Data brought to you by Benzinga APIs

Super Micro Stock Is Rising Friday: What's Going On? - Super Micro Computer (NASDAQ:SMCI)

Super Micro Computer, Inc. SMCI stock is trading higher on Friday after the company announced that it entered into a strategic partnership under a memorandum of understanding with DataVolt. What To Know: Under the partnership, Super Micro will help build hyperscale AI campuses throughout Saudi Arabia. The company will provide a fully tested and optimized IT solution, including high performance AI servers, networking, storage, racks and advanced liquid cooling systems, which Super Micro says can reduce power costs by up to 40%. The collaboration will also fast-track delivery of the company's GPU platforms and rack PnP systems for DataVolt's campuses. "Super Micro is thrilled to work together in this important effort to deliver significantly enhanced computing power for the next generation of AI infrastructure," said Charles Liang, President and CEO of Super Micro. The collaboration is subject to the completion of definitive agreements. The estimated minimum market value of the products involved is approximately $20 billion. See Also: Oracle, Cleveland Clinic, G42 Unite To Launch AI-Powered Healthcare Platform SMCI Price Action: At the time of writing, Super Micro stock is trading 4.64% higher at $46.00, according to data from Benzinga Pro. Image: via Shutterstock SMCISuper Micro Computer Inc$46.275.25%Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock - anytime. Unlock RankingsEdge RankingsMomentum93.80Growth90.94Quality94.92Value63.83Price TrendShortMediumLongOverviewMarket News and Data brought to you by Benzinga APIs

Is Super Micro Computer Stock a Buy? | The Motley Fool

The boom in artificial intelligence (AI) may be hitting its next leg. Microsoft just reported accelerated cloud computing growth due to AI, while OpenAI's ChatGPT is gaining hundreds of millions of users around the globe. One stock benefiting from this recovery is Super Micro Computer (SMCI 5.00%). The data center assembler is up around 20% in the last month and just got an upgrade from a Wall Street analyst. Should you buy Super Micro Computer stock to for the next leg up in AI? In the last five years, Super Micro Computer's revenue is up over 500%. This is due to the growing spending on data center solutions from AI infrastructure providers like Microsoft. Super Micro Computer is an expert in assembling data centers with advanced computer chips from the likes of Nvidia, where Super Micro Computer spends a lot of money. Companies like Microsoft will go to Super Micro Computer for efficient outsourcing of AI data center assembly as they try to build out more computing resources as fast as possible to keep up with demand. Management is currently guiding for $21.8 billion to $22.6 billion in revenue this fiscal year (ending in June), which is a slight decline from its previous guidance but would still represent solid growth from $15 billion in revenue last fiscal year. As demand seems to be picking up for AI infrastructure again, Super Micro Computer is seeing its stock rocket higher. However, it is still down 67% from all-time highs and currently sports a market cap of $23 billion. Super Micro Computer is simply a middleman for computer chips and data centers. Nvidia has a 62% operating margin. Amazon Web Services (AWS) has a 37.5% operating margin. Last quarter, Super Micro Computer had a gross margin under 10%. What does this mean? Super Micro Computer is able to sell its products at only a slight premium to its input costs, which gives it extremely slim profit margins compared to its suppliers and customers. Nvidia and the AI cloud infrastructure companies hold a lot of power in the relationship. Last quarter, Super Micro Computer had a slim operating margin of just 3.2%. This could pose trouble in a cyclical downturn, which will eventually come for the AI market. This is the ideal operating environment for Super Micro Computer -- you couldn't ask for more demand from customers -- yet it still is barely generating a profit. SMCI PE Ratio (Forward) data by YCharts. Things are going well for Super Micro Computer right now. Its stock is up over 1,000% in the last five years, even including its recent drawdown. The stock still looks cheap, with a market cap of $23.2 billion and a forward price-to-earnings ratio of 19. If demand for AI data center assembly keeps growing, the stock will likely be higher in a few years. I still don't think it is a good buy for a long-term portfolio. A cyclical downturn will eventually arrive in data center spending, which will almost assuredly lead to declining profit margins for Super Micro Computer. Given its already razor-thin profit margins with demand for its products and services at a fever pitch, it is likely to lose money when the cycle inevitably flips. This may not happen for a year or five, but it will happen eventually. Super Micro Computer has thin margins because it does not provide the most value for the AI sector. This comes from Nvidia's innovative computer chips, which it can sell at a premium price, and the cloud infrastructure providers selling computing power to software companies. Super Micro Computer does have a lot of revenue right now, but it is simply a middleman packaging computer chips together. It has practically zero competitive edge. Even though Super Micro Computer is growing fast today and looks to be trading at a cheap price, investors would be smart to avoid buying shares. This is a cyclical company with no long-term competitive advantage in its industry.

Why Super Micro Computer Ripped Higher Today | The Motley Fool

Supermicro has been a controversial stock over the past six months, as former auditor Ernst & Young resigned in October; however, the company's new auditor, BDO, signed off on the company's financial statements in February, allowing the artificial intelligence (AI) server company to remain listed. However, a relatively disappointing June quarter outlook revealed on its May 6 earnings report, at least compared with expectations, sent the stock down again more recently. Nevertheless, analysts at Raymond James initiated coverage on Supermicro today with an outperform rating and $41 price target -- about 30% higher than where the stock closed yesterday. The Raymond James team, led by analyst Simon Leopold, is optimistic on Supermicro due to its continued leadership in AI infrastructure, with around 70% of its revenue coming from AI servers. The team also believes Supermicro occupies a "sweet spot" between the high-end enterprise server makers like Dell Technologies and HP Enterprises and the "original device manufacturers" (ODMs), which make low-cost servers on contract for third parties like the cloud giants. Supermicro's "middle" position based on its building block architecture and ecosystem enables it to produce highly customized designs in volumes and at very competitive prices. In addition, Raymond James cites Supermicro's large U.S. footprint relative to other server makers as an advantage in the age of tariffs. Raymond James also points out challenges, especially the current Hopper-to-Blackwell transition in AI GPUs. That was cited by Supermicro management as the reason for the underwhelming March quarter results and June quarter guide, as customers took time to decide which platform to build. But as long as AI remains a long-term secular theme, Raymond James is betting Supermicro will be able to translate that into growth opportunities, due to its strong competitive position relative to other business models.

Is Super Micro Computer Stock a Buy Now? | The Motley Fool

Super Micro Computer (SMCI 5.00%), more commonly known as Supermicro, went on a wild ride over the past year. The maker of artificial intelligence (AI) servers closed at a record split-adjusted high of $118.81 on March 13, 2024, which marked a 1,020% gain over the previous 12 months. At the time, investors were impressed by its brisk sales of liquid-cooled AI servers, which ran on Nvidia's high-end data center graphics processing units (GPUs). But today, Supermicro trades at about $47. Supermicro lost its luster as it struggled with a delayed 10-K filing due to accounting issues, the departure of its auditor, delisting threats, and regulatory probes. Its slowing growth and declining gross margins also indicated it was losing its pricing power against its larger competitors. The company finally hired a new auditor, filed its overdue 10-K this February, dodged a delisting, and seemed to placate the regulators. But its growth is still cooling off as the macro and competitive headwinds intensify across the evolving AI market. So should investors still buy its stock today? Supermicro is still an underdog in traditional servers compared to market leaders like Hewlett Packard Enterprise and Dell Technologies. But it carved out a niche with its dedicated AI servers, and Raymond James estimates it now controls about 9% of that growing market. Its close relationship with Nvidia also gave it access to a steady supply of top-tier data center GPUs. Supermicro's revenue surged 46% in its fiscal 2022 (which ended in June 2022), 37% in fiscal 2023, and 110% in fiscal 2024. Its gross margin expanded from 15.4% in fiscal 2022 to 18% in fiscal 2023 as the AI market heated up. But its gross margin declined to 14.1% in fiscal 2024 as it faced tougher competition and relied on aggressive pricing strategies to sell more servers. Over the past year, its revenue growth continued to cool off as its gross margins shrank. Data source: Supermicro. YOY = year-over-year. Many of its customers postponed their new AI server purchases in anticipation of Nvidia's next-gen Blackwell chips, while supply chain constraints made it harder to fulfill its existing orders. The macro headwinds exacerbated that pressure by forcing many companies to rein in their spending on pricey AI servers. As a result, its inventory levels rose, its pricing power waned, and its gross margins contracted. For the fourth quarter of fiscal 2025, Supermicro expects its revenue to grow at a midpoint of 13% year over year as it ramps up its production of Blackwell-powered servers and data center building block solutions -- which bundle its AI servers and software for quick deployments. For the full year, it expects its revenue to rise 46% to 51%. That outlook is still impressive, but it was scaled back from its prior outlook for 57% to 67% growth. Analysts expect its revenue to rise 48% in fiscal 2025, 36% in fiscal 2026, and 25% in fiscal 2027. We should take those estimates with a grain of salt, but investors shouldn't expect it to grow as rapidly as it did over the past three years. That slowdown wouldn't be surprising, since Hewlett Packard Enterprise, Dell, and other major server makers have been rolling out more dedicated AI servers for the booming market. Supermicro established an early mover's advantage in the space, but it doesn't have much of a moat against those rivals. Supermicro still faces a lot of macro and competitive challenges, but it also looks like a bargain at 18 times next year's earnings. The AI server market could still have a compound annual growth rate of 34.3% from 2024 to 2030, according to MarketsandMarkets Research, so there could be plenty of room for Supermicro, Hewlett Packard Enterprise, and Dell to grow without trampling one another. If you believe Supermicro can defend its niche with its high-end liquid-cooled servers, its stock might be worth accumulating as it trades far below its all-time highs. But investors should watch its gross margins closely to see if it can maintain its pricing power in this tough market.

Raymond James initiates SMCI coverage with outperform rating on AI tailwinds By Investing.com

Investing.com -- Raymond (NSE:RYMD) James has initiated coverage on Super Micro Computer (NASDAQ:SMCI) with an Outperform rating and a $41 price target, highlighting the company's strong position in AI-optimized infrastructure and accelerating revenue growth. AI platforms now account for nearly 70% of Supermicro's revenue, making it a leader among branded server vendors. The broker estimates Supermicro's full-year 2026 (FY26) revenue at $29.8 billion with EPS of $3.03, representing a compound annual growth rate (CAGR) exceeding 25%. "Supermicro has positioned itself in a sweet spot between the branded IT suppliers like Dell (NYSE:DELL) and Hewlett Packard Enterprise (NYSE:HPE), and contract manufacturers like Quanta," Raymond James analysts wrote, underlining its ability to combine scale manufacturing with customized engineering. Despite its impressive growth, Raymond James notes that the stock's valuation is held back by performance lumpiness and concerns related to internal controls, which led to delayed SEC filings and auditor changes. However, the issue has been resolved, with no findings of misconduct. Raymond James values SMCI using a blended multiple approach, applying an 11x price-to-earnings (P/E) to 2026 earnings, supported by the stock's high growth profile relative to peers. The firm's bull case implies a $88 fair value, assuming "accelerating growth driven by improved share gains, and continued AI demand." While margins remain a concern -- Supermicro reported a 9.7% non-GAAP gross margin in F3Q25 due to inventory write-downs -- the bank expects improvement as the Nvidia (NASDAQ:NVDA) Blackwell GPU ramp progresses and economies of scale materialize. "Customer mix will also influence margin, and we anticipate enterprises provide some relief to the pressure from tier 2 cloud providers," the analysts said. They also flagged the company's customer concentration risk, with one customer representing 20% of sales in FY24, and pointed to limitations in enterprise services and financing capabilities compared to competitors like Dell and HPE. Nonetheless, analysts view Supermicro as well positioned to benefit from ongoing AI infrastructure investment, particularly with the company expanding its U.S. manufacturing to produce 1,500 liquid-cooled AI racks per month. While tariff risks and the ongoing trade disputes overhang the sub-sector, SMCI, unlike its competitors, has a substantial U.S. footprint, giving it an edge. "While recent lumpiness tied to product transitions and limited enterprise services constrain valuation, we believe SMCI's 25%+ revenue CAGR and expanding U.S. footprint support a re-rating," the analysts said.