Super Micro Computer (SMCI) is eyeing to expand its presence in Silicon Valley with the launch of a third campus. The AI (artificial intelligence) server maker is aiming to build a giant campus to ramp up its manufacturing capacity and continue offering industry-leading total IT (information technology) solutions for AI, Cloud, Storage, and Edge/5G.
SMCI successfully submitted its delayed 10-K and 10-Q filings with the SEC (Securities and Exchange Commission) by the due date of February 25. Additionally, the company has pacified investors’ concerns about its Nasdaq delisting and is now fully focused on expanding its business operations. SMCI’s expansion plans are supported by San Jose’s Mayor Matt Mahan, who is excited about the “Made in America” concept and the potential creation of thousands of new jobs and economic activity in the region.
SMCI Plans to Leverage its Silicon Valley Presence
SMCI’s entire campus is expected to be nearly 3 million square feet upon completion, with the first building spanning over 300,000 square feet. The construction is slated to commence in 2025. The new campus is expected to bolster SMCI’s DLC (direct liquid cooling) technology for the growing needs of data centers. SMCI predicts that up to 30% of new data centers will embrace liquid cooling technology, acting as a strong catalyst for the company’s expansion plans. Currently, SMCI is able to deliver 5,000 air-cooled (2,000 liquid-cooled racks) per month through its existing campuses.
Notably, Super Micro Computer manufactures one of the best building block liquid-cooled solutions for AI factories and the HPC (High-Performacne Computing) market. This helps data centers to operate more efficiently and reduces the carbon footprint as it lowers electricity consumption over time. The region’s major power supplier, PG&E also extended its support towards SMCI’s expansion plans. The company noted that it is ready to supply reliable and sustainable power to fulfil the growing needs of the technology sector.
SMCI’s Corporate Insiders Sell Shares
Three of SMCI’s corporate insiders sold shares on February 26, according to their respective Form 4 filings with the SEC dated February 28. Charles Liang, the President, CEO, Director, and more than 10% owner of SMCI sold shares worth $2.32 million. Similarly, Chiu-Chu (Sara) Liu Liang, who is also a director and a majority shareholder of SMCI, sold SMCI stock worth $2.32 million last week. Finally, George Kao, the SVP of Operations at SMCI sold shares worth $3.62 million.
SMCI stock currently has a Very Negative Insider Confidence Signal on TipRanks, based on Informative Sell transactions worth $8.3 million undertaken in the last three months.
Is Super Micro a Good Buy?
Despite overcoming delisting uncertainties, analysts still prefer to remain on the sidelines on Super Micro stock. On TipRanks, SMCI stock has a Hold consensus rating based on three Buys, four Holds, and two Sell ratings. Also, the average Super Micro Computer price target of $45.75 implies 10.4% upside potential from current levels. Notably, SMCI stock has gained 36% so far this year.
