This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy.
Super Micro Computer (SMCI), a significant global retailer of servers and AI racks, has seen its shares post modest gains since the start of the year in affinity with the broader market rally. However, one Wall Street analyst thinks that SMCI investors should brace for turbulence, "at least until May/June."
Loop Capital Raises $SMCI PT to $40 from $35, Maintains Buy Rating
Analyst comments: 'SMCI remains an important company in an important space with both special situation catalysts (i.e. getting SEC filing current) and fundamental as GB200 & GB300 (Blackwell) ramp heading into…
— Wall St Engine (@wallstengine) January 23, 2025
Loop Capital analyst Ananda Baruah concedes at the outset that Super Micro Computer is an "important company in an important space" that continues to contend with "both special situation catalysts (i.e. getting SEC filing current) and fundamental as GB200 & GB300 (Blackwell) ramp heading into summer and key customers get into full swing (Tier 2 CSPs)."
This, of course, alludes to the myriad of challenges that Super Micro Computer continues to face, ranging from allegations of accounting malpractice, which have already led to the unceremonious exit of its previous, well-regarded audit firm, to the ongoing filing delays for the company's financial statements and the looming 25th of February deadline to rectify those filing lacunae or face the specter of a damaging delisting from the Nasdaq exchange.
Coming back, Baruah notes that Super Micro Computer's "two largest customers have huge plans for 2025, and we believe it is inevitable that SMCI benefits." The anslyst goes on to note:
"That said, we anticipate SMCI could experience a clunky 1HCY2025, at least until May/June when key Tier 2 customers begin getting GB200 allocation."
Accordingly, Baruah has raised the stock price target for Super Micro Computer from $35 to $40, while conceding that the stock's journey to this target will not be a "straight line," given the "Blackwell ramp and Tier 2 purchasing patterns."
As per a recent assessment by Lynx Equity, SMCI maintains a lead in liquid-cooled technology over its peers, enabling the rapid deployment of resource-hungry servers in a close configuration and leading to improved economies of scale.
Super Micro Computer currently has the capacity to deploy 5,000 server racks per month, including 2,000 liquid-cooled ones. Moreover, SMCI's planned expansion at a major factory in Malaysia will soon double its existing capacity to 10,000 server cabinets per month.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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