By Adam Clark

Super Micro Computer stock was gaining early Monday. The server maker is looking to put its accounting controversy behind it and focus on meeting demand for liquid-cooled data centers.

Shares, trading under the ticker SMCI, rose 1.8% to $42.20 in the premarket. The stock fell 3.5% on Friday.

Super Micro is suffering from a hangover after the initial celebration last week when it avoided delisting and met its compliance deadline for submitting financial filings. Shares have fallen 20% over the past five trading sessions.

Mizuho Securities analyst Vijay Rakesh reinstated coverage of the stock on Friday with a Neutral rating and a $50 price target.

"SMCI has seen limited impact from compliance issues, retaining a good product portfolio and strong overall AI server market growth," Rakesh wrote.

However, Rakesh said Super Micro is facing more competition from AI server rivals such as Dell Technologies. He estimated the company's share of the global AI server market will be around 23% this year, down slightly from its 25% share in 2024,

Super Micro said Friday that it would build a third campus in California's Silicon Valley to accelerate production of liquid-cooled services for data centers.

"We anticipate that up to 30% of new data centers will adopt liquid cooling solutions. Today, Supermicro can deliver 5,000 air-cooled or 2,000 liquid-cooled racks per month to support substantial orders," said CEO Charles Liang in a statement.

The new development, which will cover 3 million square feet, is expected to generate hundreds of new jobs and has the support of San Jose Mayor Matt Mahan, Super Micro said. Construction is set to begin later this year.

Write to Adam Clark at adam.clark@barrons.com

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March 03, 2025 05:36 ET (10:36 GMT)

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