Super Micro Computer (SMCI), a provider of servers and IT systems, is set to announce its Q4 FY25 earnings in early August. Wall Street expects the company to report EPS of $0.44 on revenue of $5.96 billion in Q4. Ahead of the results, Asiya Merchant, a 5-star analyst at Citi, raised her price target on the stock to $52, up from $37. While she maintained a Neutral rating, Merchant believes stronger demand for AI servers and easing supply constraints could support growth in the coming quarters.
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Merchant ranks 280 out of more than 9,800 analysts on TipRanks. She has a success rate of 75%, with an average return per rating of 26.80% over a one-year period.
Analyst Sees AI Growth Ahead, But Margin Concerns Linger
Merchant, a Top-rated analyst, sees growing demand in the AI space, especially from large companies and government customers. She noted that Super Micro is beginning to benefit from the ramp-up of Nvidia’s (NVDA) GB200 and GB300 platforms, which started shipping in May.
She added that Super Micro’s management sounds hopeful about turning current deals into real orders over the next two quarters. As Blackwell GPU supply improves, she believes the company will find it easier to deliver products and grow its sales.
Still, the analyst remains cautious. She warned that profit growth could slow, as larger rivals like Dell (DELL) and Hewlett Packard Enterprise (HPE) are stepping up competition in the same space. This added pressure could make it harder for Super Micro to grow its margins, even if sales continue to rise.
Higher Price Target Reflects AI Buzz
Merchant raised her price target to $52 based on a higher earnings multiple of 13.5x FY2027 estimates, compared to her earlier range of 9–10x. She said the move reflects stronger valuations across AI-related stocks and an overall lift in the market.
However, the analyst kept her Neutral rating, citing fair valuation and margin pressure ahead of Q4 earnings.
Is SMCI Stock a Buy?
Super Micro Computer stock has a consensus Moderate Buy rating among 14 Wall Street analysts. That rating is based on six Buy, six Hold, and two Sell recommendations issued in the last three months. The average SMCI price target of $40.92 implies 18.75% downside from current levels.
