A rising tide lifts all boats the saying goes, and Super Micro Computer (NASDAQ:SMCI) has ridden yesterday and today’s massive swell up and away.
Confident Investing Starts Here:
- Quickly and easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions
- Receive undervalued, market resilient stocks straight to you inbox with TipRanks' Smart Value Newsletter
Indeed, the market has been positively bullish following the announcement that the U.S. and China were pausing most tariffs for 90 days, as investors latched onto hopes that the two superpowers were on their way to settling their score. At the moment, SMCI’s share price is up by double digits since the market opened yesterday.
SMCI needed a bit of a boost following a rough couple of weeks. Its share price dropped after the company shared its non-audited financials last month, which clearly disappointed the market.
Not only were revenues down 19% from the past quarter, but the company also missed both top- and bottom-line projections. Adding insult to injury, the company lowered guidance for Fiscal 2025 from $23.5 to $25 billion to $21.8 to $22.6 billion.
However, there were some bright spots for the AI server company, as revenues of $4.6 billion for Q3 2025 were still up 19% year-over-year. So, which way will the winds blow for the AI server company?
Even before the recent surge, one top investor known by the pseudonym The Asian Investor expressed confidence that SMCI will do just fine, as the company is well-placed to benefit from the ongoing AI spending craze.
“Despite a bad quarter, long-term fundamentals in the Data Center industry and AI spending trends remain strong,” explained the 5-star investor, who is among the top 4% of TipRanks’ stock pros.
The Asian Investor noted that AI-related spending is slated to rise by 76.4% to roughly $644 billion during FY 2025. This bodes quite well for SMCI.
In addition, The Asian Investor detailed that the sequential decline during this past quarter was due to customers delaying purchasing decisions – this could therefore lead to higher sales figures in ensuing quarters.
Summing it all up, The Asian Investor was not scared off by the disappointing performance last quarter, believing that good things are in store up ahead.
“With AI spending trends looking to be intact, I believe we could see a decent rebound in the company’s share price going forward,” concluded The Asian Investor, rating SMCI a Strong Buy. (To watch The Asian Investor’s track record, click here)
Wall Street is not quite as bullish, however. With 6 Buy, 5 Hold, and 1 Sell ratings, SMCI has a Hold (i.e. Neutral) consensus rating. Its 12-month average price target of $40.83 would yield gains of ~8% in the year ahead. (See SMCI stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.