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Supermicro (SMCI), a leading GPU-as-a-Service player and a prominent retailer of liquid-cooled AI racks, has managed to clinch one of the larger deals inked during President Trump's investment-focused trip to Saudi Arabia.
To wit, Supermicro has now inked a "multi-year partnership agreement" with DataVolt, a leading Saudi data center company that plans to "pair gigawatt-class renewable and net-zero green hydrogen power with the industry’s most advanced server technology."
While the granular details of this $20 billion agreement have not been made public, the deal will see Supermicro supply high-density GPU platforms and rack-scale liquid cooling systems to DataVolt over a number of years.
As per the numbers crunched by Goldman Sachs, the deal could feasibly entail $5 billion in annual revenue and an annual EBIT of around $200 million:
"Assuming a 5-year deal, 5% margins, and the entirety of the $20B represents IT hardware revenue, this would represent $4 bn of annual revenue and $200 mn of annual EBIT."
Despite the sizable windfall that Supermicro stands to gain from its just-inked agreement with DataVolt, Goldman Sachs has chosen to reiterate its 'Sell' rating for the stock, replete with a $24 share price target. For reference, SMCI shares are currently trading at the $46.86 price level in pre-market trading.
On the flip side, Raymond James analyst Simon Leopold has adopted a much more bullish view of Supermicro in light of its "Party in the desert" deal with DataVolt, reiterating an 'Outperform' rating and a $41 stock price target.
Leopold believes that the deal "expands visibility with multi-year hardware backlog and supports upward estimate revisions" for Supermicro. However, the analyst remains concerned about the "uncertain" build-out timing, currently pegged for 2028.
As we noted recently, Supermicro reported $4.6 billion in revenue for its fiscal Q3 2025, matching its recently issued guidance but failing to outpace the consensus expectation of Wall Street analysts, pegged at $5.05 billion.
It was SMCI's guidance, however, that was generally found anemic. After all, the company now expects to report its fiscal Q4'25 revenue in the range of $5.6 billion to $6.4 billion vs. the $6.81 billion consensus estimate. It also expects to earn FY 2025 revenue of between $21.8 billion and $22.6 billion, constituting a substantial discount to the $23.5 billion consensus estimate.
According to Rosenblatt, Supermicro faces revenue realization delays, to the tune of ~$1 billion and precipitated by the ongoing customer evaluations of the next-generation NVIDIA Blackwell GPU platforms. Rosenblatt analyst Kevin Cassidy thinks this revenue from the March-ending quarter will now materialize in the June and September quarters.
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