Super Micro Computer Captures 8% of Global AI Server Market Amid Growing Competition

Citi: Super Micro Computer (SMCI) Has Captured 8 Percent Of The Global AI Server Revenue Share

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. As one of the leading GPU-as-a-Service players and a prominent retailer of liquid-cooled AI racks, Super Micro Computer (SMCI) has predictably attracted significant attention in recent months as the broader AI story continues to unfold on the global macro stage. Now, Citi has initiated coverage of the high-momentum stock with cautious optimism. To wit, Citi analyst Asiya Merchant has now pegged a $39 stock price target on Super Micro Computer, while initiating coverage with an overall 'Neutral/High Risk' rating. Merchant notes: "With 8% of AI server revenue share, Supermicro remains one of the leading players to GPU-as-a-Service cloud providers and enterprises, and we expect Supermicro to continue to benefit from broader secular trends in AI-driven infrastructure. " Nonetheless, the Citi analyst feels that an "increasingly competitive AI Server landscape" and the attendant pressure on margins warrants caution. In a critical insight, Merchant notes that Super Micro Computer shares are currently trading at a multiple of just 9-10x its Next Twelve Months (NTM) P/E ratio, which is below the 5-year median multiple of 11-12x. However, given "the current macro-related (tariff uncertainty) and competitive intensity concerns," the Citi analyst feels this discount is "warranted." Meanwhile, as we noted recently, Apple has reportedly placed ~$1 billion worth of orders for NVIDIA's GB300 NVL72 racks with Super Micro Computer and Dell, presumably in a bid to deploy a "Gen AI LLM cluster" to improve Siri's artificial intelligence capabilities. At the time of writing, Super Micro Computer shares are up a little over 2 percent in early pre-market trading. The stock has notched gains of around 20 percent so far this year, and has emerged as one of the best performing stocks in the hardware space, as recently pointed out by Goldman Sachs itself. Bear in mind that the company expects to earn $40 billion in full-year revenue in its FY 2026 on the back of growing shipments of Blackwell-based products.

SMCI: 'Positive AI server demand momentum offset by heightened competition' - Citi By Investing.com

Investing.com -- On Friday, Citi initiated coverage of Super Micro Computer (NASDAQ:SMCI) with a Neutral rating and $39 target price. The bank cited strong secular growth in AI infrastructure but warned that intensifying competition could limit upside. "Supermicro remains one of the leading players to GPU-as-a-Service cloud providers and enterprises," Citi analysts wrote. With an estimated 8% share of AI server revenue, the company is "leveraged towards a high-growth, HPC/AI computing" segment, with about 70% of its revenue tied to AI-related demand, according to the bank. Citi noted that CoreWeave, xAI, and Tesla (NASDAQ:TSLA) are among Supermicro's key customers. While acknowledging Supermicro's strong market share gains, growing from roughly 3% to 6% in the past three years, Citi said the company is now facing "an increasingly competitive AI Server landscape pressuring margins." Dell (NYSE:DELL), in particular, was flagged as a rising threat. "Shares are currently trading at 9-10x NTM PE, below its 5-year median (11-12x), which we believe is warranted," Citi wrote, attributing the valuation discount to concerns around "tariff uncertainty" and intensifying competition. Citi also cited financial and structural concerns, including "high levels of customer concentration (58% from top 3 customers), trailing FCF margin vs. peers, and investor concerns around internal controls (following past delays with their quarterly filing)." Despite the competitive headwinds, Citi said it remains "constructive on secular AI server spend," though estimates have been moderated in light of "broader tariff-related economic concerns that could pose some expansion challenges in the non-hyperscaler + enterprise market." Citi flagged several risks to monitor, including "AI server spend and revenue volatility given GPU allocation and macro concerns," as well as the company's need to raise capital and improve free cash flow.