Rosenblatt Raises Super Micro Computer Price Target to $40

Rosenblatt analyst Kevin Cassidy raised the price target on Super Micro Computer (NASDAQ: SMCI) to $40.00 (from $32.00) while maintaining a Buy rating.

“Supermicro delivered a beat-and-raise quarter, though reported revenue missed estimates due to customer-related supply constraints.

While revenue has surged over 2.5x in the past two years, gross profit grew by a more modest 60%, creating a disparity between the company’s revenue growth profile and its recent stock performance.

Moving forward, management expects its “One-Stop Shop” DCBBS—which helps customers deploy AI factories faster and with engineering assurance—to drive over 20% of gross profits long-term.

This higher DCBBS contribution, combined with a growing software and services mix, should expand gross margins and improve profitability predictability.

Consequently, we see a clear path for gross margins to climb back above 10%, returning toward the low-teens average seen from FY22–FY24.

On the legal front, shares have recovered most of their decline following the U.S. Attorney’s indictment regarding alleged export-control violations.

While these legal affairs may temper near-term enthusiasm, downside appears limited as the company expects to file its 10-Q and anticipates no financial restatements.

Driven by SMCI’s technology leadership, robust order backlog, access to the AI supply chain, and the market’s insatiable demand for AI compute, we maintain our Buy rating and are raising our price target to $40 based on 10x FY27E Non-GAAP EPS.”

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