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Super Micro Computer (SMCI) Giving Back Some Gains After Friday's Upgrade

  • 17.03.2025 18:46
  • moneymorning.com
  • Keywords: Fraud Allegations, Accounting Issues

Super Micro Computer (SMCI) shares dropped 2% in premarket trading after rallying last week, with JPMorgan upgrading its outlook due to growing demand for Nvidia’s Blackwell chips. Despite the positive trend, competition from HPE and Dell may impact margins, while investor caution remains due to lingering accounting concerns.

SMCI NewsJPM/PJsentiment_satisfiedNVDAsentiment_satisfiedHPE/PCsentiment_dissatisfiedDELLsentiment_dissatisfied

Estimated market influence

Super Micro Computer (SMCI)

Positivesentiment_satisfied
Analyst rating: N/A

The 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...

JPMorgan

Positivesentiment_satisfied
Analyst rating: —

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 Blackwell chips.

Nvidia

Nvidia

Positivesentiment_satisfied
Analyst rating: Strong buy

Super Micro jumped on Friday after an analyst at JPMorgan raised his outlook...

Hewlett Packard Enterprise

Negativesentiment_dissatisfied
Analyst rating: —

There will also be more competition from the likes of Hewlett Packard Enterprise and Dell Technologies, which is likely to trim Super Micro’s margins.

Dell Technologies

Dell Technologies

Negativesentiment_dissatisfied
Analyst rating: Strong buy

There will also be more competition from the likes of Hewlett Packard Enterprise and Dell Technologies, which is likely to trim Super Micro’s margins.

Context

Analysis of Super Micro Computer (SMCI) Stock Performance and Market Implications

  • Stock Performance:

    • SMCI shares dropped 2% in premarket trading on Monday after rallying 8% to close last week.
    • The stock is up 38% year-to-date in 2025, marking a significant recovery from its decline of nearly 75% in 2024 due to accounting fraud allegations and SEC filing delays.

  • Analyst Upgrade:

    • JPMorgan analyst Samik Chatterjee upgraded SMCI's stock outlook from "underweight" to "neutral."
    • Price target raised to $45 per share (up from $35), reflecting expectations of revenue growth driven by higher GPU prices and increased demand for Nvidia's Blackwell chips.

  • Market Trends:

    • The data center infrastructure market is poised for growth, with hyperscalers accelerating data center builds.
    • Demand for Blackwell base server shipments is expected to rise significantly compared to previous generations.

  • Competitive Landscape:

    • Increased competition from major players like Hewlett Packard Enterprise and Dell Technologies may pressure SMCI's margins.
    • Despite this, the fast-growing market suggests opportunities for all key players.

  • Investor Considerations:

    • While the analyst upgrade signals optimism, lingering concerns about SMCI's accounting practices warrant caution.
    • The worst of the company's issues appear to have subsided, but long-term effects and regulatory impacts remain areas of focus.