Needham Lowers Super Micro Computer Price Target to $40
Needham analyst N.
Quinn Bolton lowered the price target on Super Micro Computer (NASDAQ: SMCI) to $40.00 (from $51.00) while maintaining a Buy rating.
“SMCI reported F2Q26 revenue of $12.68BN (vs. Street’s estimate of $10.43BN), and guided F3Q26 revenue to $12.3BN (vs. Street’s estimate of $10.250BN).
The beat is attributed to a major customer’s data center deployment. Our key takeaways include: 1) The company raised its FY26 revenue outlook to at least $40BN (vs. prior guidance of $36BN).
Management believes this forecast is still conservative as it implies a steep revenue decline in F4Q26; 2) The company’s DCBBS is gaining momentum across key customers.
Notably, DCBBS accounted for 4% of profit in F1H26, and management expects it to increase to a double-digit % by CYE26; and, 3) F3Q26 NG GM declined ~310bps to 6.4%, attributed to the major customer’s DC deployment.
Our PT decreases to $40, based on 15x our new CY27 NG EPS est., to reflect multiple compression in the AI hardware sector.”
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