Wedbush raises Super Micro Computer PT to $30 from $30, maintains Neutral rating.

Wedbush raises Super Micro Computer PT to $30 from $30, maintains Neutral rating.

July 02, 2025

Wedbush Securities has recently updated its price target for Super Micro Computer (NASDAQ:SMCI) to $30, maintaining its Neutral rating on the stock. The move comes as the company continues to show strong performance in its third-quarter results and looks forward to a robust fourth quarter.

Super Micro Computer reported $4.6 billion in third-quarter sales, a 19% year-over-year increase, despite coming in 2.8% below consensus. The company attributed the shortfall to timing shifts as customers awaited Nvidia’s Blackwell GPUs, rather than any demand erosion. Management expects the deferred $400 million of orders to ship in Q4 and early FY 2026 [1].

The company entered Q4 with $3.9 billion of inventory on hand, equivalent to 81 days of supply, positioning it for a major shipment surge. The firm's B200 HGX and GB200 NVL72 liquid-cooled servers, along with B300/GB300 Blackwell-optimized platforms, are set to exceed its own guidance of at least $6 billion in Q4 revenue [1].

Super Micro’s aggressive expansion includes over 30 Blackwell-based AI solutions launched across Europe as of June 2025, slashing deployment lead times from 12–18 months to just three. Its multi-year, $20 billion collaboration with DataVolt will supply ultra-dense GPU clusters to hyperscale AI campuses in the U.K., Saudi Arabia, and the U.S. [1].

After a working-capital–driven dip in FY 2024, SMCI generated $626.8 million of operating cash flow in Q1 2025, flipping to a positive net cash position post-financing. Debt-to-equity stands at a conservative 42%, with interest coverage above 27x, metrics that compare favorably against HPE and Dell [1].

Wedbush's new price target reflects the company's strong fundamentals and growth prospects. Despite the recent price target increase, the stock remains undervalued compared to historical norms, trading near 16x forward EV/EBITDA and 18x forward P/E. Analysts forecast $3.25 of EPS in FY 2026, implying a price target of $81.25 at a 25x multiple, or over 35% upside [1].

However, the company faces transitional risks from GPU cycles and tariffs temporarily pressuring margins. Order delays ahead of Nvidia’s Blackwell rollout account for $400–$500 million of Q3 shortfall, while U.S. tariffs of 10% may impose $200–$300 million in annualized cost headwinds. Gross margins contracted to 14.8% in FY 2024 from 17.6% a year earlier, but management expects a rebound as AI hardware mix shifts back to higher-margin solutions [1].

References:

[1] https://www.tradingnews.com/news/super-micro-computer-nasdaq-smci-stock-climbs-on-strong-q3-results-and-ai-driven-q4-outlook