Super Micro Computer (NASDAQ:SMCI) drew investor attention Friday after J.P. Morgan shifted its rating on the company to Neutral from Underweight. The upgrade came as the uncertainty tied to its regulatory filings cleared.
Shares were up 1% in premarket activity.
Analyst Samik Chatterjee cited the resolution of pending filings with the Securities and Exchange Commission and growing demand for Blackwell-based server products as key drivers for the rating change. These new servers are reportedly seeing significantly higher uptake compared to previous models, supported by higher average selling prices.
Despite these positives, J.P. Morgan remains cautious about Super Micro's profit margins. The company could face margin compression due to increased competition and aggressive pricing, alongside higher spending linked to internal control improvements.
The firm raised its price target on the stock to $45 from $35. Additionally, Chatterjee said Nvidia's (NASDAQ:NVDA) recent forecast should help support Super Micro's growth trajectory.
He now anticipates Super Micro's fiscal 2026 revenue to reach $39 billion, up from a prior estimate of $34 billion, but projects gross margins to ease slightly to 11.1%, down from 11.2%. Earnings are forecast at $3.70 per share, with potential downside from higher debt and interest costs.
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