Super Micro Computer NASDAQ: SMCI, a leader in AI technology, recently dodged a bullet. The company risked removal from the NASDAQ stock exchange. The company’s accounting practices caused big problems, which made it delay several filings.

Luckily, the firm met the deadline to complete these filings, preventing its delisting from the NASDAQ.

So, now that Super Micro has made good on this obligation, what are the future prospects for the stock? Is there now an opportunity for its shares to experience significant appreciation? I’ll break down important aspects of the company’s business to answer this question.

Detailing the Market Reaction to SMCI’s Filing Win

After regaining NASDAQ compliance, Super Micro shares jumped over 12%. Notably, the company did not have to issue any restatements to its previously filed reports. This was a very good development. The company’s accounting concerns could have meant it needed to correct the numbers from its previous reports.

Still, since this event, shares of Super Micro Computer are down nearly 24% as of the Mar. 5 close. This shows that there are still significant concerns about the company. Becoming up to date on its filings was far from the only thing markets want to see to become bullish on this stock again.

Reactions to this news from Wall Street analysts were somewhat mixed. Goldman Sachs raised its price target by 11% to $40 per share. Barclays reinstated coverage with a $59 target. Loop Capital was notably the most bullish of these three analysts, raising its target by a whopping 40% to $70. The firm’s Mar. 5 closing price was just under $39. Compared to this, the average of these price targets implies significant upside in Super Micro shares of nearly 45%.

Financial Deep Dive: Where Super Micro Has Been and May Go

In calendar Q4 2024, Super Micro saw impressive revenue growth of 55%. However, this is a notable deceleration from the previous four quarters, which showed growth of over 100%. In calendar year 2025, expectations of revenue growth sit at 60% versus 125% growth in 2024. Gross margins dropped nearly 400 basis points from 2023 while operating margins slipped 140 basis points.

Analysts expect these figures to continue sliding by around 200 basis points in 2025. Still, analysts project that adjusted earnings per share (EPS) will increase by 17%.

Super Micro is a maker of AI server racks. It places advanced chips into these racks and then sells them to data centers. This business is notably low-margin because of the massive pricing power suppliers like NVIDIA NASDAQ: NVDA have. However, Super Micro gains a lot from its partnership with NVIDIA.

Customers want their products because NVIDIA has teamed up with them. Super Micro notably has an advantage over other competitors in this space for those who need the best performance possible. Its advanced liquid cooling systems add significant value to customers, and it still has a leg up on the competition.

However, even with this strong position, the company still generated cash from operations of -$2 billion over the last 12 months. This is largely due to mismatches between when it has to pay suppliers and when it gets paid. The company is still profitable on an operating and net income basis.

Even with revenue growth so high in some of the past quarters, profit margins are not overly impressive. Its operating margins hover around 10% or lower. Its gross margin was in the mid to high teens during this massive growth period. With growth expected to slow considerably, margins are expected to take a hit. This shows that the company’s competitive advantages might not be as strong as many believe. The company could struggle to grow profits significantly as growth declines.

SMCI: Near-Term Appreciation in Play, But Long-Term Prospects Are Risky

When looking at the company’s valuation multiples, they all sit basically in the middle of the pack over their range for the past three years. Given the ongoing growth in demand for AI servers, Super Micro shares could see a notable increase in value within the next year.

Price targets from Wall Street support this notion. However, the company’s weak profits and cash flow during its peak growth stage raise doubts about its value as a long-term investment. 

Concerns over management transparency are still there. Fixing recent accounting and filing issues doesn’t absolve management of earlier mistakes. An extended pattern of management transparency and consistently higher margins would boost confidence in Super Micro’s ability to be a strong long-term investment.

Before you consider Super Micro Computer, you’ll want to hear this.

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While Super Micro Computer currently has a Hold rating among analysts, top-rated analysts believe these five stocks are better buys.

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When it comes to AI, there are many different types of businesses that participate in this complex technological value chain. Some companies design or make advanced chips that perform intense computational work. Others build massive data centers or provide high-speed cables that let chips talk to each other. Eventually, these investments lead to the creation of computer programs that utilize AI workloads.

One important part of this AI value chain is server companies. These companies purchase graphics processing units (GPUs) from suppliers like NVIDIA NASDAQ: NVDA. They then put those chips, along with other components, together to create a server. In its simplest form, a server is just a computer.

A GPU is just one of many components needed to make a computer work. Motherboards, storage, and RAM are other parts that are needed. Server companies bring all these parts together and then sell them as a package. They have specific packages optimized for AI workloads. Together, these three server companies may bring in $40 billion in AI revenue in 2025.

Dell Technologies: AI Servers Could Make Up 15% of the Business in 2025

Dell Technologies NYSE: DELL believes AI servers will become a significantly more important part of its overall business in 2025. The tech company just had its fiscal full-year 2025 earnings release.

For Dell, this fiscal period is the same as the 2024 calendar period. Over that year, the firm achieved AI server shipments of nearly $10 billion. Many consider shipments a close proxy for revenue, as companies can typically recognize these shipments as revenue once they deliver them. Overall, this $10 billion accounted for just over 10% of Dell’s total revenue for the year.

Dell also announced specific guidance related to AI servers. In fiscal 2026, or the 2025 calendar year, Dell is forecasting $15 billion in AI server shipments. Based on the firm’s total revenue guidance of $103 billion, Dell is predicting that AI server revenue as a percentage of total revenue will increase to nearly 15%.

Hewlett Packard Enterprise: Smaller But Rapidly Growing AI Systems Business

Next up is Hewlett Packard Enterprise NYSE: HPE. In fiscal Q4, which equates to the three months ended Oct. 31, 2024, HPE saw what it calls “AI-systems” revenue of $1.5 billion. Aside from servers, the company also breaks out revenue for AI services. This includes things like consulting and training enterprise customers on how to best utilize its AI servers. Its total revenue from AI systems of $4.1 billion in fiscal 2024 was a 173% increase over fiscal 2023.

HPE didn’t give specific guidance around how much AI-systems revenue it will see in 2025, but there are some trends we can use to deduce this number. Assuming the same level of AI-systems revenue from fiscal Q4, HPE would bring in $6 billion from this source in fiscal 2025. This would represent around 46% growth in terms of total AI-systems revenue compared to fiscal 2024. The company also reported that it has around $3.5 billion in backlogs for AI systems.

Overall, its AI-systems revenue is likely to be between $4 billion and $6 billion in fiscal 2025, corresponding to the first 12 months ended Oct. 31, 2025. The number could be even higher, considering the firm reportedly inked a $1 billion deal to supply the social media company X with AI servers. HPE beat out Dell and the next company on this list to get these sales.

Super Micro Computer: $20 Billion in AI Revenue Is on the Table in 2025

Super Micro Computer NASDAQ: SMCI is a hot topic in the market these days. Its AI-related revenue might reach double what Dell and HPE bring in combined. The company recently released its financial results for fiscal Q2 2025, equivalent to the Q4 2024 calendar quarter. Management said that AI-related platforms contributed to more than 70 percent of the company’s revenue that quarter.

Based on company-provided guidance, analysts predict $28.4 billion in total revenue over the next four quarters. If AI-related platforms keep bringing in 70% of revenue, the company will earn $20 billion in sales from them in 2025.

Adding $20 billion from Super Micro, $15 billion from Dell, and presumably $5 billion from HPE brings the combined figure to $40 billion for 2025. Overall, these companies are growing their business by taking advantage of the value they can offer in the AI ecosystem.

Before you consider Hewlett Packard Enterprise, you’ll want to hear this.

MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Hewlett Packard Enterprise wasn’t on the list.

While Hewlett Packard Enterprise currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

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