Artificial intelligence (AI) server provider Super Micro Computer (SMCI) saw its stock jump nearly 8% on Friday, as JPMorgan upgraded its rating to Hold from Sell and increased the price target to $45 from $35. JPMorgan analyst Samik Chatterjee noted that the company has “cycled past” the uncertainty associated with its delayed SEC filings. SMCI stock has rallied 38% so far this year.
JPMorgan Upgrades SMCI Stock
Aside from the fact that Super Micro is current with its financial filings, Chatterjee also upgraded the stock as he believes that it is at the “cusp of benefitting” from the ramp in the server shipments that are powered by Nvidia’s (NVDA) Blackwell platform. These Blackwell-based servers are already witnessing significantly higher demand than the prior generation and are expected to boost SMCI’s revenue growth due to their higher average selling price (ASP).
Based on favorable data points in recent weeks about a better supply ramp from Nvidia, the 5-star analyst raised his revenue estimate for the next 12 months. However, he is cautious about SMCI’s gross margins due to heightened competition. Chatterjee expects the company’s gross margin to moderate in Fiscal 2026 compared to Fiscal 2025. This is expected to result in operating margin moderation and limit the extent of EPS growth compared to revenue growth in Fiscal 2026.
Chatterjee highlighted that his new price target of $45 for Super Micro Computer stock reflects a higher P/E (price-to-earnings) multiple of 10x compared to the previous multiple of 9x, but still indicates a modest discount to peer Dell Technologies (DELL), which is trading at a P/E of 11x. He explained that the discount is due to SMCI’s unfavorable track record with regard to its audit and filing issues, which is expected to be an overhang on the P/E multiple. The analyst is also sidelined on SMCI stock due to certain pending issues like CFO change, improvements to internal controls, and closure of the DOJ probe.
Chatterjee ranks 384 out of more than 9,400 analysts tracked by TipRanks. He has a success rate of 57% and has achieved an average return per rating of 10.4% in the past year.
Is SMCI Stock a Buy, Sell, or Hold?
Despite the ongoing challenges, SMCI is focused on driving further growth and is targeting revenue of $60 billion by Fiscal 2026, backed by continued innovation. Last week, the company announced the launch of a new optimized storage server that uses its Petascale architecture and is powered by Nvidia’s Grace CPU Superchip.
Wall Street has a Moderate Buy consensus rating on Super Micro Computer stock based on four Buys, five Holds, and one Sell recommendation. The average SMCI stock price target of $49.89 implies about 18.4% upside potential from current levels.
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