MW Super Micro is back in compliance. Is that enough to make its stock a buy?

By Therese Poletti

A Mizuho analyst has brought back his coverage of Super Micro shares - but he declines to recommend them given competitive challenges

Super Micro Computer Inc., has regained compliance with Nasdaq. It's not gotten back some coverage on Wall Street.

Some analysts had suspended coverage of Super Micro shares $(SMCI)$ as the company faced a risk of delisting due to its delayed financial filings. Mizuho Securities analyst Vijay Rakesh reinstated coverage of the stock on Friday, but declined to recommend it given that the company has tougher competition in the market for artificial-intelligence servers.

He has a neutral rating and a $50 price target on the stock.

"We believe overall Super Micro remains well positioned," Rakesh said in a note to clients, adding that the company has priority component allocations for servers for the enterprise and sovereign markets. At the same time, however, the company faces a "more competitive landscape with peers Dell Technologies Inc. $(DELL)$ and Wistron Corp. (TW:3231)," which is based in Taiwan.

He estimated Super Micro's share of the global server market will be around 23% in calendar 2025, down slightly from its 25% share in calendar 2024, as competition grows.

Rakesh noted that he believes Super Micro saw "limited impact" from its compliance issues, "retaining a good product portfolio and strong overall AI server market growth." He also pointed out that, while Super Micro company satisfied Nasdaq's listing requirements by getting in its audited statements following an extension, it still "needs work" on its internal controls.

He also pointed out that Super Micro's customer concentration could also be an issue going forward, with the top two customers at around 58% of revenues for the December quarter.

Read also: Cerebras filing points to a recurring concern in AI: customer concentration.

Rakesh also said that he believes Super Micro's recent forecast of $40 billion in revenue for fiscal 2026 "could be optimistic given increased competition and slow Blackwell ramps," referring to Nvidia Corp.'s $(NVDA)$ latest-generation chip platform. Mizuho is modeling $34.3 billion for Super Micro's fiscal 2026 revenue, and $38.9 billion for fiscal 2027.

Read also: Can Super Micro really do $40 billion in revenue next year? Some analysts are skeptical.

Shares of Super Micro were trading fractionally lower in morning trading, down. They've had one of their best months on record, jumping 50% in February, as the company avoided delisting and met its compliance deadline this week.

-Therese Poletti

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February 28, 2025 11:11 ET (16:11 GMT)

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