A Wall Street Analyst On Super Micro Computer: “Having Stood On The Sidelines Of The Nascent GB200 Cycle So Far, We Believe SMCI Could Re-enter The Blackwell Fray With The Launch Of GB300”

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.

It is a rare sight these days to find positive analyst commentary on Super Micro Computer (SMCI), a major retailer of servers and AI racks, given the company's long list of troubles, including allegations of accounting malpractice, the unceremonious exit of a well-regarded audit firm, and ongoing filing delays for the company's financial statements. Yet, Lynx Equity has been consistently bullish on Super Micro Computer throughout its long litany of travails. Today, as NVIDIA gears up for its keynote address at the CES, the firm has published another investment note on SMCI's prospects.

Lynx Equity Reiterates $60 PT on $SMCI, Cites $NVDA Keynote as Positive Catalyst

Analyst comments: "According to media reports, the NVDA keynote at CES today is expected to touch upon next-generation GB300, a platform that will likely require even more stringent cooling…

— Wall St Engine (@wallstengine) January 6, 2025

To wit, Lynx Equity views NVIDIA's keynote address at the CES as a positive catalyst for Super Micro Computer.

"According to media reports, the NVDA keynote at CES today is expected to touch upon next-generation GB300, a platform that will likely require even more stringent cooling specifications than GB200."

While delineating its bullish stance on SMCI, the firm notes:

1. Super Micro Computer "has had a head-start in liquid-cooled technology over its peers, a position we believe it is in no danger of losing in the foreseeable future."
2. "Having stood on the sidelines of the nascent GB200 cycle so far, we believe SMCI could re-enter the Blackwell fray with the launch of GB300."
3. Super Micro Computer can also benefit from the heightened cooling needs of AMD's MI325X AI accelerator and Google's TPU6.
4. "SMCI has already had an association with Google’s liquid-cooled data centers for several years."

This aligns with Lynx Equity's previous note on the topic back in December, when it had taken pains to highlight Super Micro Computer's "critical position in the all-important business of installing AI infrastructure," especially in light of the stock's receding delisting odds.

As a refresher, the Nasdaq exchange has now given Super Micro Computer until the 25th of February 2025 to publish its annual report for its FY 2024 and the requisite financial statements pertaining to its fiscal Q1 2025, thereby removing the hanging threat of a damaging delisting.

Nonetheless, Lynx Equity does highlight ongoing threats for the volatile stock:

1. "SMCI is a speculative stock."
2. "It remains uncertain whether the company will file its 10-K and 10-Qs to the regulator’s satisfaction by the upcoming deadline in less than two months."
3. "The stock sold off last month following a media report that the company may raise capital from private sources, though this has not been confirmed."

As to the last point, Lynx Equity believes that it is imperative for Super Micro Computer to raise additional liquidity "to address its large inventory and free up working capital for the company’s capital-intensive AI server business."

The firm goes on to note:

"A debt-financed deal could be positive for common shares if the company remains relevant in the growing business of liquid-cooled data centers."

Accordingly, Lynx Equity has reiterated its $60 price target for Super Micro Computer shares, implying a ~70 percent upside potential from current levels.

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