Stock price trajectory for Super Micro Computer: Will it reach $15 or $70 following considerable post-earnings drop?
Super Micro Computer (SMCI), a company specialising in high-powered, energy-efficient servers for AI, cloud services, and data centers, has experienced a mixed response following its Q4 earnings report. The report, which came as a letdown to investors, missed Wall Street's expectations on both the top and bottom lines [1].
The Street-high price target for SMCI stock remains at $70, indicating nearly 54% potential upside [1]. However, the near-term outlook is cautious, with a consensus Hold rating among analysts and moderate upside potential of about 6% to 8.5% over the next year [1][3].
The miss was partly due to the impact from President Donald Trump's tariffs on goods imported into the United States [1]. Despite this, longer-term forecasts from 24/7 Wall St. are notably bullish, projecting the stock price to rise significantly over the next five years—potentially reaching $116.60 by 2030, which implies roughly a 151% gain based on anticipated strong revenue and net income growth driven by demand for AI servers and related products [1].
The Q4 earnings report showed revenue for the quarter rising 7.4% year-over-year (YOY) to $5.8 billion, but still falling short of the expected $5.9 billion [1]. Adjusted EPS came in at $0.41, marking a notable 24% decline from the prior year and falling below the consensus estimate of $0.44 [1]. A key red flag was the drop in gross margin, which slipped to 9.5% from 10.2% a year ago [1].
Analysts' opinions are now deeply divided about SMCI stock, with the most bullish target suggesting it could soar to $70, and the most bearish seeing it dropping all the way to $15 per share [1]. JPMorgan analyst Samik Chatterjee lowered the firm's price target to $45 from $46, maintaining a "Neutral" rating [1]. Bank of America Securities analyst Ruplu Bhattacharya slightly raised the price target to $37 from $35 while sticking with an "Underperform" rating [1].
The comeback rally appears to be facing turbulence lately, with shares tumbling 19% in just the past five trading days following the latest earnings miss [1]. Super Micro's market capitalization is $27.8 billion [1]. The expected revenue for Q1 of fiscal 2026 is between $6 billion and $7 billion, while the expected adjusted EPS is between $0.40 and $0.52 [1].
Investors should be prepared for some volatility as the company navigates competitive pressures and earnings challenges but may benefit from the long-term growth narrative in the AI server market. The growth expectation reflects confidence in Supermicro's positioning in the AI hardware market, as also referenced by positive investor sentiment following its year-to-date 100% stock price increase in 2025 [2].
SMCI stock regained traction due to its leadership in the artificial intelligence (AI) hardware space, growing demand for next-gen servers, and close partnership with chip giant Nvidia (NVDA) [1]. The guidance for Q1 of fiscal 2026 provided by Super Micro also missed Wall Street's expectations [1]. As of June 30, Super Micro reported $5.2 billion in cash and equivalents, alongside $4.8 billion in total bank debt and convertible notes [1].
[1] Yahoo Finance [2] MarketWatch [3] CNBC
Investors are faced with divided opinions about Super Micro Computer (SMCI) stock, as analysts have set a Street-high price target of $70 and the most bearish prediction sees it dropping to $15 per share. Despite the near-term cautious outlook, longer-term forecasts show potential for significant growth, driven by strong revenue and net income fueled by demand for AI servers and related technology.
