Super Micro Computer (SMCI) is facing multiple price target cuts from top Wall Street analysts following a dismal quarterly performance. SMCI missed analysts’ expectations on both sales and earnings for its fiscal third quarter, undermining investor and analyst confidence on its future growth prospects. To make matters worse, Super Micro Computer lowered its Fiscal 2025 outlook, putting a dent on a once hailed artificial intelligence (AI) darling.
SMCI Faces Multiple Price Target Cuts
Since releasing its Q3FY25 results on May 6, Super Micro Computer has received mixed analyst ratings. Five analysts have assigned a “Buy” rating, while five have rated a “Hold.” All analysts had one common reason behind the price cuts, SMCI’s disappointing revised guidance for Fiscal 2025. Let’s look at some of the analyst reactions to SMCI’s results.
Northland Securities analyst Nehal Choksi, who once gave SMCI its Street High price target of $70, slashed it down to $59, implying 81.7% upside potential. The five-star analyst earlier had “bullish expectations” from SMCI’s guidance. However, he lowered his FY26 estimates due to SMCI’s lower-than-expected June quarter guidance. Despite this, Choksi believes that SMCI will continue to witness sequential ramps driven by demand from Nvidia’s (NVDA) Blackwell chips.
Meanwhile, Wedbush analyst Matt Bryson cut SMCI’s price target from $40 to $30 (7.6% downside potential), citing a weak outlook. Bryson, a five-star analyst on TipRanks, noted that SMCI pulled back on its FY25 guidance owing to tariff impacts and macroeconomic uncertainty. He stated that Nvidia was currently shipping its GB200 and B200 only to select vendors on priority basis, but expects the shortage to ease in the next quarter. However, Bryson added that this advanced chip shortage is forcing SMCI to sell off its older Hopper inventory to customers at discounted prices, impacting its margins.
In the meantime, Kevin Cassidy, another five-star analyst at Roseblatt Securities, reduced his price target on Super Micro Computer stock to $50 (from $55), implying 53.9% upside potential. Cassidy highlighted that SMCI achieved revenue at the high end of its recently revised Q3 guidance. Management attributed GPU (Graphic Processing Units) shipment delays to customers’ review of NVDA’s next-generation Blackwell GPU platforms. He also added that the $1 billion revenue delay impacting the March quarter, is expected to be shipped during the June and September quarters. Despite these current hiccups, Cassidy expects strong growth driven by solid demand for advanced GPUs. He has incorporated a gradual production ramp and minor geopolitical tensions into his model estimates.
Is SMCI a Good Stock to Buy?
Super Micro Computer has indeed seen better days in the past. Currently, analysts remain divided on SMCI’s long-term stock trajectory, mainly due to the macro headwinds. On TipRanks, SMCI stock has a Moderate Buy consensus rating based on six Buys, five Holds, and two Sell ratings. Also, the average Super Micro Computer price target of $38.67 implies 19.1% upside potential from current levels. In the past year, SMCI stock has lost 60.5%.
