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On Friday, Loop Capital maintained a positive outlook on Super Micro Computer (NASDAQ:SMCI), reiterating a Buy rating with a steadfast $70.00 price target. The stock has shown remarkable momentum with a 37.42% return in the past week alone. The investment firm’s analysis points to Super Micro as a significant beneficiary of recent joint investment announcements by the U.S. and Saudi Arabia. According to InvestingPro analysis, the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report. This optimism stems from a landmark $20 billion deal with DataVolt, a Saudi cloud service provider (CSP) and Neocloud, which is expected to bolster Super Micro’s standing in artificial intelligence and data center solutions.
According to Loop Capital, the impact of this deal could start reflecting in Super Micro’s financials in the second half of 2025 and continue into 2026. The company has already demonstrated strong growth potential, with revenue surging 82.49% in the last twelve months to $21.57 billion. The firm believes that Super Micro is not only attracting new customers but also has the potential for growth with existing ones. The deal with DataVolt is seen as a proxy for the potential new customer opportunities available to Super Micro.
Super Micro has also been identified as having a new 10% customer as of March 2025, which now accounts for 14% of its business. Additionally, the company is expanding its reach with Crusoe and is expected to gain traction with Apple (NASDAQ:AAPL), which could become a significant client. Another customer, CRWV, is planning to double its data centers from 33 to 60, which could substantially increase revenue for Super Micro given CRWV’s current contribution of approximately 25% to Super Micro’s business.
Loop Capital highlights Super Micro’s innovative solutions, specifically its Data Center Building Block Solutions (DCBBS), which are designed to enable new customers and Neoclouds to scale rapidly with minimal expertise. With a strong current ratio of 6.66 and moderate debt levels, Super Micro appears well-positioned to support its expansion plans. This development is seen as an indication that Super Micro anticipates a wave of new customers who could benefit from these offerings. The firm’s commentary underscores the strategic importance of these recent developments, positioning Super Micro for potential growth in the near future. For deeper insights into Super Micro’s financial health and growth prospects, explore the detailed analysis available on InvestingPro, featuring 17+ additional ProTips and comprehensive valuation metrics.
In other recent news, Supermicro has announced the launch of its Data Center Building Block Solutions (DCBBS), aimed at simplifying the construction of liquid-cooled AI data centers. This solution provides a comprehensive package including servers, storage, networking, and cooling, all designed to enhance efficiency and reduce costs. Additionally, Supermicro has started shipping servers equipped with AMD (NASDAQ:AMD)’s latest EPYC 4005 Series processors, which aim to balance performance, scalability, and cost-effectiveness for dedicated hosting markets.
In a significant development, Supermicro has entered into a $20 billion multi-year agreement with DataVolt, a prominent data center firm based in Saudi Arabia. This partnership is expected to boost the deployment of advanced rack systems and GPU platforms in Saudi Arabia and the U.S. Despite this major deal, Citi maintained a Neutral rating on Supermicro, while Goldman Sachs continued to hold a Sell rating, citing competitive pressures. Raymond (NSE:RYMD) James, however, reiterated an Outperform rating, highlighting the company’s leadership in hyperscale AI infrastructure and its strategic partnership with DataVolt.
These recent developments reflect Supermicro’s ongoing commitment to innovation in IT solutions and its strategic direction in expanding AI infrastructure capabilities. The company’s focus on reducing total cost of ownership and environmental impact remains a key aspect of its offerings. As Supermicro continues to execute its strategic initiatives, investors are closely monitoring the potential revenue impact of these multi-year agreements and product launches.
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