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As one of the leading GPU-as-a-Service players and a prominent retailer of liquid-cooled AI racks, Super Micro Computer (SMCI) has predictably attracted significant attention in recent months as the broader AI story continues to unfold on the global macro stage. Now, Citi has initiated coverage of the high-momentum stock with cautious optimism.
To wit, Citi analyst Asiya Merchant has now pegged a $39 stock price target on Super Micro Computer, while initiating coverage with an overall 'Neutral/High Risk' rating.
Merchant notes:
"With 8% of AI server revenue share, Supermicro remains one of the leading players to GPU-as-a-Service cloud providers and enterprises, and we expect Supermicro to continue to benefit from broader secular trends in AI-driven infrastructure. "
Nonetheless, the Citi analyst feels that an "increasingly competitive AI Server landscape" and the attendant pressure on margins warrants caution.
In a critical insight, Merchant notes that Super Micro Computer shares are currently trading at a multiple of just 9-10x its Next Twelve Months (NTM) P/E ratio, which is below the 5-year median multiple of 11-12x. However, given "the current macro-related (tariff uncertainty) and competitive intensity concerns," the Citi analyst feels this discount is "warranted."
Meanwhile, as we noted recently, Apple has reportedly placed ~$1 billion worth of orders for NVIDIA's GB300 NVL72 racks with Super Micro Computer and Dell, presumably in a bid to deploy a "Gen AI LLM cluster" to improve Siri's artificial intelligence capabilities.
At the time of writing, Super Micro Computer shares are up a little over 2 percent in early pre-market trading. The stock has notched gains of around 20 percent so far this year, and has emerged as one of the best performing stocks in the hardware space, as recently pointed out by Goldman Sachs itself. Bear in mind that the company expects to earn $40 billion in full-year revenue in its FY 2026 on the back of growing shipments of Blackwell-based products.
