It has been a good stretch for Super Micro Computer (NASDAQ:SMCI), as its share price has climbed almost 50% over the past three months.
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The company seems to have left concerns over accounting inconsistencies behind, while also riding high on the wider AI growth trends that are lifting many a boat.
Still, not everything is sublime. Net sales dropped last quarter to $4.60 billion from $5.68 billion in the previous one, while the company lowered its full year guidance from $23.5 billion to $25.0 billion to $21.8 billion to $22.6 billion.
In the company’s latest earnings call, CEO Charles Liang cited short-term economic uncertainty and tariff worries for the slowing numbers, though he insisted that the company’s long-term roadmap is in good shape.
One investor known by the pseudonym Bay Area Ideas is ready to embrace the long view as well.
“With the near-term results seemingly weighing on the valuation, I believe now is a good opportunity for investors with a long horizon to scoop up shares,” explains the 5-star investor.
Bay Area Ideas notes the company’s continuing integration with the industry-leading Nvidia, always a good chip to have in one’s pocket. SMCI was the first to ship the next gen Supermicro NVIDIA B200/GB200, and the company’s portfolio also includes the NVDIA HGX B300 NVL16 and the GB300 NVL72.
“It seems the company is positioning quite nicely for future demand,” asserts Bay Area Ideas, adding that SMCI is working towards 30% of all new data centers using their Directly Liquid Cooled technology in the coming year.
Increased manufacturing capacity in both Silicon Valley and Mexico are also strong signs that the company is ready to capitalize on long-term AI demand, the investor points out.
Therefore, Bay Area Ideas is looking beyond a potentially “ugly” near term and keeping a focus planted firmly on the AI-powered future.
“Developments such as the company’s readiness to ramp Blackwell and the expansion of manufacturing capacity show that the long-term growth story seems to be intact,” concludes Bay Area Ideas, who rates SMCI a Buy. (To watch Bay Area Ideas’ track record, click here)
That seems to be the view on Wall Street as well. With 6 Buy, 6 Hold, and 2 Sell ratings, SMCI holds a Moderate Buy consensus rating. Its 12-month average price target of $42.67 has a downside of some 14%. (See SMCI stock forecast)
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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.