Super Micro Computer (SMCI) stock won a new Street-High price target from Northland Securities despite missing Q2 FY25 expectations and issuing weak guidance for Q3. Five-star analyst Nehal Chokshi lifted the price target on SMCI stock to $57 from $54, implying an incredible 43.7% upside potential from current levels. Chokshi remains highly bullish on Super Micro stock’s trajectory despite the current chaos and maintains a Buy rating on the stock.
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Interestingly, Chokshi ranks #60 of the 9,389 analysts ranked on TipRanks, boasting a 25% average return per rating and a 60% success rate. To date, Chokshi’s best recommendation has been on SMCI stock between January 19, 2023 to January 19, 2024. The analyst earned an impressive 497.4% return for his Buy view on SMCI during this period.
Here’s Why Chokshi Has a High PT on SMCI Stock
Super Micro Computer provides liquid cooling technology that is deployed in data centers that run artificial intelligence (AI) models. The analyst believes that Super Micro Computer is poised for growth going forward, once it clears the current hurdles and distractions from the delayed quarterly filings and delisting fears.
It is important to note here that SMCI has already raised $700 million in funding via private placements of 2.25% Convertible Senior Notes due 2028 and renegotiated terms of its senior notes due 2029. This draws a sense of belief that investors are still ready to bet on SMCI’s growth potential.
Some of Chokshi’s beliefs in SMCI’s ability include:
- Significant differentiation compared to peers, making it an attractive bet
- SMCI’s $40 billion sales outlook for Fiscal 2026 looks “viable”
- Super Micro will have to raise more capital if the company ramps up sales to $40 billion in 2026 due to the capital-intensive nature of its AI server business. The analyst sees Q4 FY26 sales close to $12 billion
Overall, Chokshi believes that Super Micro will continue to garner market share gains in the multi-trillion-dollar AI domain.
Is SMCI Stock a Good Buy Now?
Analysts still remain divided on Super Micro Computer stock. On TipRanks, SMCI stock has a Moderate Buy consensus rating based on three Buys, three Holds, and one Sell rating. Also, the average Super Micro Computer price target of $38.40 implies 3.2% downside potential from current levels. Year-to-date, SMCI stock has blasted over 30%.
