Shares of Super Micro Computer (SMCI) are down 2% in premarket trading Monday after rallying 8% higher to close out the week last week. SMCI stock is now up 38% so far in 2025, a dramatic turnaround from its dismal performance last year when allegations of accounting fraud and failure to file financial statements with the SEC caused the maker of computers, servers, networks, storage solutions, and data center workstations optimized for artificial intelligence to lose nearly three-quarters of its value.
Super Micro jumped on Friday after an analyst at JPMorgan raised his outlook on the stock from underweight to neutral, believing those issues are behind the company now and it is set to benefit from growing demand for Nvidia’s (NVDA) Blackwell chips.
Analyst Samik Chatterjee said Super Micro is on “the cusp of benefiting from the ramp in Blackwell base server shipments which are already seeing materially higher demand than the prior generation.” He sees the data center infrastructure stock enjoying a revenue boost this year due to the higher selling prices of the graphics processing units (GPUs). Chatterjee also lifted his price target to $45 per share from $35 per share.
It was not a ringing endorsement of the stock, however. Essentially telling you to hold what he already suggested you sell is better, though not exactly bullish, and he still sees plenty of uncertainty around the federal and SEC investigations into Super Micro’s accounting.
There will also be more competition from the likes of Hewlett Packard Enterprise (HPE) and Dell Technologies (DELL), which is likely to trim SMCI’s margins. But the market is growing so fast from hyperscalers ramping up data center builds that there is likely to be plenty of business from all players in the space.
Investor caution is still warranted, though arguably the worst of the clouds have parted.
