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On Thursday, Northland raised the price target on Super Micro Computer (NASDAQ:SMCI) to $70.00, up from the previous $57.00, while maintaining an Outperform rating on the company’s shares. The adjustment follows a series of industry events and the firm’s analysis of market dynamics. According to InvestingPro data, SMCI has demonstrated remarkable revenue growth of 125% over the last twelve months, though the stock has experienced significant volatility, dropping 9.4% in the past week alone.
Super Micro Computer’s market share in the March quarter was influenced by temporary factors, according to Northland’s assessment. The firm’s GPU as a Service (GPUaaS) customers are positioned in the Blackwell queue, which has affected their market presence. This insight was shared during a fireside chat with Super Micro Computer’s Investor Relations team, Michael Staiger and Krishna Shankar, on Friday, February 28th. InvestingPro analysis indicates the company maintains strong financial health with a "GREAT" overall score, supported by a robust current ratio of 6.38 and moderate debt levels.
The discussion came after Super Micro Computer filed its delayed financial reports, including the FY24 10K and quarterly reports for F1Q25 and F2Q25, on Tuesday, February 25th. The filings were followed by NVIDIA (NASDAQ:NVDA)’s modest data center revenue increase announcement on Wednesday, February 26th, and DELL’s earnings report on Thursday, February 27th.
Northland’s analysis suggests that Super Micro Computer’s guidance for the March quarter, which projected a decrease of 12% to an increase of 6% quarter over quarter, is primarily influenced by its GPUaaS customers’ position in the Blackwell queue. This situation has been consistent with earlier communications from the company regarding its March quarter trajectory.
Furthermore, Northland highlights that consensus projections for DELL’s servers and networking revenue are flat quarter over quarter for the April quarter, aligning with Super Micro Computer’s midpoint guidance. This consistency supports the belief that NVIDIA’s Blackwell shipments for the January quarter, which are recognized by server OEMs with approximately an eight-week lag, were mainly directed towards hyperscalers that neither DELL nor Super Micro typically serve. Trading at a P/E ratio of 15.7, SMCI appears undervalued according to InvestingPro’s Fair Value model, suggesting potential upside for investors looking at the company’s strong fundamentals and market position.
In other recent news, Supermicro has announced a significant expansion in Silicon Valley with the introduction of a third campus, which will include a new building over 300,000 square feet, contributing to job creation and economic growth in the region. The expansion is expected to enhance Supermicro’s capabilities in producing advanced data center technology. Meanwhile, several analyst firms have updated their ratings and price targets for Supermicro. Mizuho (NYSE:MFG) Securities maintained a Neutral rating with a $50 price target, noting Supermicro’s regained compliance with NASDAQ listing requirements and a positive outlook for upcoming fiscal years.
Goldman Sachs raised its price target to $40, citing renewed confidence in Supermicro’s ability to meet revenue targets after timely financial filings. Barclays (LON:BARC) upgraded the stock to Equalweight with a $59 price target, acknowledging Supermicro’s strong position in the AI server market but expressing concerns about competitive advantage and financial controls. Lastly, Loop Capital increased its price target to $70, maintaining a Buy rating and highlighting Supermicro’s growth potential with its Blackwell product lines and engagement with Tier 2 Cloud Service Providers. These developments reflect a mix of cautious optimism and acknowledgment of challenges facing Supermicro.
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