Super Micro Computer (NASDAQ:SMCI) is a name that has courted plenty of controversy over the past year. The issue has centered on the reliability of its financials given the company delayed the filing of financial reports, which resulted in SMCI facing delisting from the NASDAQ. The disarray was such that Ernest Young resigned as its independent auditor, citing a lack of trust in management.
But the story has taken a turn. SMCI has finally submitted its overdue reports, regaining compliance with regulators – an event that Northland analyst Nehal Chokshi sees as a game-changer. According to Chokshi, the financials have been proven to be trustable with a “high degree of certainty.”
With that chapter closed, it’s time to shift the focus to what lies ahead for the company. To gain deeper insight, Chokshi, who ranks in the top 1% of Wall Street stock pros, recently engaged with SMCI’s investor relations team. So, what key takeaways did he uncover?
Well, for one, SMCI still has the same outlook for the March quarter, expecting results to range from a 12% decline to a 6% increase compared to the previous quarter. This is mainly because SMCI’s GPU-as-a-Service (GPUaaS) customers are unlikely to be among the first to receive Nvidia’s Blackwell GPUs.
Chokshi also notes that the Street expects Dell’s servers and networking business to remain flat sequentially in the April quarter, aligning with the midpoint of SMCI’s guide. This suggests that Nvidia’s Blackwell shipments in the January quarter were primarily directed toward hyperscalers, which Dell and SMCI don’t usually serve. The analyst also reminds investors that there’s about an eight-week delay between Nvidia recognizing revenue and when server OEMs, like Dell and SMCI, reflect it in their earnings.
Looking ahead, Chokshi sees SMCI’s ambitious $40 billion revenue target for FY26 as achievable, though he’s maintaining a more conservative estimate of $30.9 billion – what he believes is the minimum the company will achieve. Meanwhile, industry checks suggest SMCI has a significant competitive edge in GenAI servers, largely due to its early adoption of Direct Liquid Cooling (DLC) technology. Additionally, its modular component design, rooted in its well-known Building Block Architecture, continues to be a key differentiator.
“As such,” the 5-star analyst went on to say, “we believe SMCI is well positioned to return to a share gain trajectory in GenAI servers minimally starting in F1Q26 (Sept Q), and as such we see SMCI’s $40B FY26 target (65% revenue growth relative to FY25 midpoint guidance) as reasonable.”
All told, Chokshi rates SMCI shares as an Outperform (i.e., Buy), while raising his price target from $57 to a joint Street-high of $70, implying the stock will gain 83% in the months ahead.
Yet, not everyone on Wall Street shares his enthusiasm. When it comes to ratings, the verdict is mixed: 4 Holds, 3 Buys, and 2 Sells leave SMCI with a cautious Hold (i.e., Neutral) consensus rating. However, the average price target sits at $49.14, pointing to a still-solid 28.5% gain over the next year. (See SMCI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.