Super Micro Computer Inc. (NASDAQ: SMCI) is making a strong comeback in 2025 after a year marked by regulatory hurdles and market volatility.
In the early months of 2024, the server and storage solutions provider saw its stock surge only to face a sharp reversal following a report from the now-defunct short-seller Hindenburg Research in August, which alleged widespread accounting malpractice at the company.
However, the tide began to turn by February 25, 2025, when Supermicro announced it had resolved its SEC filing delays and regained full compliance. This move restored a degree of investor confidence, though broader market pressure continued to weigh on the stock.
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Fast-forward to March, Supermicro seems to have regained its footing. At press time, shares are trading at $40.10, up 31% year-to-date, though still down roughly 5% over the past week.
The stock gained traction on March 19, when SMCI shares rallied 5.8% in a single session, following a series of company-wide announcements.
Nvidia-powered upgrades drive investor interest
A key driver behind Supermicro’s recent turnaround has been its latest platform upgrades, centered on integrating Nvidia’s (NASDAQ: NVDA) Blackwell Ultra series and adding support for the RTX PRO 6000 Server Edition GPUs. These enhancements are expected to significantly improve energy efficiency and boost computing performance.
The upgrades come at a crucial time, as the AI industry shifts its focus toward inference, the reasoning phase of AI, which requires substantially greater processing power.
Moreover, Supermicro announced a new high-performance storage server built on its proprietary Petascale architecture, powered by Nvidia’s Grace CPU Superchip. The server is designed to handle software-defined workloads, including AI and machine learning training, inference processes, and data analytics—further fueling investor optimism.
JPMorgan lifts SMCI price target
Supermicro’s recent progress has not gone unnoticed on Wall Street. JPMorgan analyst Samik Chatterjee has upgraded SMCI stock from Underweight to Neutral, while raising the firm’s price target to $45 from $35.
Chatterjee noted that Supermicro has effectively moved beyond the regulatory uncertainties that weighed on its outlook throughout 2024.
We are upgrading shares of Super Micro as the company has cycled past the uncertainty in relation to pending SEC filings and is on the cusp of benefitting from the ramp in Blackwell-based server shipments, which are already seeing materially higher demand than the prior generation, with additional benefit from higher ASPs.”
The analyst also pointed to strong demand for the company’s servers powered by Nvidia’s latest Blackwell architecture, noting higher average selling prices (ASPs) compared to prior models.
While acknowledging SMCI’s solid revenue prospects, the analyst highlighted margin pressure risks ahead, particularly due to aggressive pricing in a competitive landscape and costs associated with improving internal controls.
Despite these challenges, JPMorgan raised its valuation multiple for SMCI from 9x to 10x earnings, while still applying a discount to peers like Dell (NYSE: DELL), which trades at 11x, citing Supermicro’s regulatory track record.
The firm’s updated forecast anticipates strong revenue growth over the next 12 months but expects margin moderation in FY26 to limit EPS growth relative to revenue gains.
Featured image via Shutterstock
