April 25, 2025 – U.S. Markets — Super Micro Computer (NASDAQ: SMCI), one of the hottest names in the AI hardware space, is facing a pivotal moment. Once celebrated as a breakout growth stock during the AI boom, SMCI stock has shed over two-thirds of its value in the past year, raising questions about its long-term potential.
But now, after addressing some critical financial hurdles and ramping up partnerships with major players like Apple and NVIDIA, the company could be back on the upswing.
Supermicro’s troubles began with delayed SEC filings, regulatory scrutiny, and delisting threats. But the company managed to file its long-overdue 10-K in February, narrowly avoiding a potential Nasdaq delisting. That move, combined with a strong fiscal 2024 performance—110% revenue growth year-over-year, has sparked new optimism.
Looking forward, Supermicro expects between 74% and 101% revenue growth in fiscal 2025, as it rides the wave of AI-driven demand for liquid-cooled server racks and GPU-based systems. Analysts now forecast a compound annual growth rate (CAGR) of 37% for revenue and 22% for EPS through fiscal 2027.
Despite this strong growth outlook, SMCI stock is trading at just 9x next year’s earnings, well below its historical average. If it hits analyst targets and re-rates to a 20x forward P/E by 2027, the stock could more than double to over $73 per share.
Wall Street is starting to take notice again. Citi recently initiated coverage on SMCI with a “Neutral/High Risk” rating and a $39 price target, citing both opportunities and concerns.
According to Citi analyst Asiya Merchant, Supermicro has now captured 8% of the global AI server market, a significant milestone. However, Merchant warns that rising competition in the AI server landscape and macroeconomic pressures like tariffs may weigh on profit margins in the coming quarters.
Even so, some bullish catalysts are hard to ignore. Reports indicate that Apple placed a $1 billion order for NVIDIA’s new Blackwell-based GB300 NVL72 racks, with Supermicro and Dell set to supply the systems. These racks are key to building next-gen AI clusters, such as the rumored overhaul of Apple’s Siri.
SMCI’s full-year revenue forecast for FY 2026 stands at an eye-popping $40 billion, thanks to strong AI demand and rising shipments of Blackwell-based servers. And despite recent volatility, SMCI stock is still up about 20% year-to-date and remains one of the top performers in the tech hardware space, according to Goldman Sachs.
Yet, the path forward isn’t without obstacles. Tariffs, trade wars, and margin pressure could limit upside. And after a year of financial missteps, Supermicro will need to rebuild trust with investors and regulators alike.
Interestingly, some analysts now speculate that Reddit (NASDAQ: RDDT), the social platform turned AI data partner, could surpass SMCI in market value by 2027. Reddit’s user growth, profitable pivot, and partnerships with Google and OpenAI are fueling a bullish outlook—with a projected 59% EBITDA CAGR through 2027.
Still, if Supermicro stays on course and delivers on its aggressive growth targets, it could maintain or even grow its lead. But execution will be everything.
Is SMCI Stock a Buy Right Now?
Super Micro Computer sits at the crossroads of AI, enterprise infrastructure, and global trade. While it faces stiff competition and some reputational scars, its low valuation and high growth trajectory make SMCI stock a high-risk, high-reward play for forward-looking investors.
If it can manage costs, fend off rivals, and meet expectations, the next two years could be transformational—not just for the company, but for its stock price as well.