Loop Capital reiterates a "buy" rating on Super Micro Computer (SMCI.US) and raises the price target to $40.

Despite the volatility in Super Micro Computer (SMCI.US) in 2024, Loop Capital reiterates its "buy" rating on the stock, partly due to the ramp of Nvidia's Blackwell chips. The firm also raised its target price on the stock to $40 from $35. Super Micro Computer develops storage and server solutions, including high-performance data centers. Super Micro Computer CEO Charles Liang said in November last year: "Super Micro Computer has the expertise, speed of delivery, and ability to deploy the world's largest liquid-cooled artificial intelligence data center project with 100,000 GPUs. Super Micro Computer and Nvidia are both involved and recently deployed the project." Loop Capital analyst Ananda Baruah said: "Despite this, we expect Super Micro Computer's performance in the first half of 2025 to be poor, at least until May or June, when key secondary customers will start to receive allocations of Blackwell GB200 chips." "That said, while we have confidence in our $40 target for the stock, achieving it is not easy, given the ramp of Blackwell chip capacity and secondary buying patterns." Super Micro Computer's stock price had reached a record high of $118 in mid-March last year, and then began to fall sharply, hitting a low of $18 in November. Short seller Hindenburg disclosed its short position in the stock in August last year. The company's internal accounting issues also led to its failure to file its quarterly financial report as of September 30 last year in time. However, Super Micro Computer's stock price has rebounded since November last year. Loop Capital believes that positive catalysts may be on the way, one of which is Super Micro Computer's key customer CoreWeave, which plans to double its data center count to 60 in 2025 from about 30 in 2024.