Super Micro Computer’s preliminary December quarter results and lackluster March quarter guidance may not be the most exciting news at first glance, but according to Northland’s Nehal Chokshi, there is a bigger opportunity on the horizon for this AI server maker.
Chokshi, a top-ranked analyst on Wall Street, believes that the weak March outlook is due to delays in Nvidia’s next-gen Blackwell chips and the time needed for SMCI’s GPU-as-a-Service clients to finish their datacenter buildouts. Despite these challenges, Chokshi is optimistic that things will improve by the June quarter, as reflected in SMCI’s revised FY25 revenue guidance of $23.5 billion to $25 billion.
Looking ahead, SMCI could see revenues reach $40 billion in FY26, with potential for 60% year-over-year growth. The company even considers the $40 billion target to be conservative, based on customer demand and commitments.
Chokshi highlights the strong demand for SMCI’s Blackwell rack scale solutions, citing reasons such as feedback from industry players and Coreweave’s recent announcement.
With the GenAI market booming, Chokshi rates SMCI stock as an Outperform (Buy) with a price target of $57, indicating a 35% upside in the coming months. Other analysts also have positive views on SMCI, with a consensus rating of Moderate Buy.
While the average price target suggests the stock may have overshot its value, it will be interesting to see how analysts adjust their ratings and targets in the near future.
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