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On Wednesday, Barclays (LON:BARC) analyst George Wang adjusted the price target on Super Micro Computer (NASDAQ:SMCI) shares, bringing it down to $34 from the previous $59, while keeping an Equalweight rating on the stock. The adjustment comes as SMCI trades near $36, having shown significant volatility with a 52-week range of $17.25 to $101.40. Wang cited concerns over the company’s previous guidance, suggesting it was overly optimistic.
Wang’s assessment points to a challenging outlook for Super Micro Computer, noting there is "too much uncertainty on AI server builds with lack of visibility into CY25 as customers go through product transitions." Despite these concerns, InvestingPro data shows the company maintains strong financial health with a current ratio of 6.38 and moderate debt levels. The industry’s forecast for shipments of GB racks has been downgraded, now expecting only 25,000 racks for CY25, which is a reduction from earlier projections.
The analysis further highlights that while Super Micro has a stronger position with Blackwell HGX servers, NVIDIA (NASDAQ:NVDA) tends to prioritize shipments of NVL72 racks. This preference by NVIDIA is considered a negative indicator for Super Micro’s overall rack shipments.
Additionally, the reliance of Super Micro on specific customers like xAI and Coreweave is causing concern. This dependence is believed to expose the company to fluctuations and volatility from quarter to quarter. Moreover, there is a risk of market share loss to Asian Original Design Manufacturers (ODMs), which adds to the uncertainty surrounding Super Micro’s future performance. According to InvestingPro analysis, the stock appears slightly undervalued at current levels, with 12+ additional exclusive insights available to subscribers. Get the full picture with InvestingPro’s comprehensive research report, part of their coverage of 1,400+ US stocks.
In other recent news, Super Micro Computer, Inc. has released its preliminary financial results for the third quarter of fiscal year 2025, reporting expected net sales between $4.5 billion and $4.6 billion, which falls short of the prior guidance of $5.0 billion to $6.0 billion. The company’s anticipated GAAP diluted net income per common share is between $0.16 and $0.17, a decrease from the previously guided range. Super Micro attributes these lower-than-expected results to factors like delayed customer platform decisions and increased inventory reserves for older products. Additionally, the company has achieved a significant milestone with its new systems featuring NVIDIA HGX B200 8-GPU, setting benchmarks in AI performance. In another development, Defiance ETFs has launched the Defiance Daily Target (NYSE:TGT) 2X Short SMCI ETF, offering 2X inverse exposure to Super Micro, designed for traders seeking to leverage bets against the company’s performance. Furthermore, Super Micro has announced strategic leadership appointments, including Scott Angel as an independent director and Yitai Hu as General Counsel & Senior Vice President. Lastly, the company has introduced a new lineup of single-socket servers that rival traditional dual-socket servers, enhancing performance while offering cost savings.
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