BofA Securities has resumed coverage on Super Micro Computer (NASDAQ: SMCI) with an ‘Underperform’ rating and set a $35 price target, representing roughly 28.5% downside from current levels.
Analyst Ruplu Bhattacharya cited increasing competition in the server market as a key concern, suggesting the space is becoming increasingly crowded as more players vie for AI infrastructure opportunities.
SMCI stock closed at $49.11 on July 8, marking a 4.25% gain from the previous trading session but slipping 1.34% in premarket trading. The AI server specialist has posted impressive year-to-date returns of 63.43% and climbed 13.89% over the past month.
SMCI 12-month forecast
Despite BofA’s bearish target, broader Wall Street sentiment remains more optimistic. Based on 13 analysts’ price targets over the past three months, SMCI holds a “Moderate Buy” consensus, with 6 Buy ratings, 6 Hold ratings, and 1 Sell rating.
The average 12-month price target is $41.42, suggesting a potential 15% downside. That said, the 12-month forecasts still show significant variation, ranging from a high of $70.00 to a low of $24.00.
Revenue growth outlook
Super Micro is projected to deliver strong revenue growth, with analysts expecting sales to jump nearly 48% to $22 billion in FY’25 ending June 2025. Growth is expected to continue into FY’26, with revenue forecasted to climb another 35% to roughly $30 billion as data center spending remains robust.
The company’s close ties to Nvidia’s GPU ecosystem position it well to benefit from the upcoming Blackwell GPU ramp, particularly given SMCI’s reputation for quickly adapting server systems to support Nvidia’s (NASDAQ: NVDA) latest products. However, margin pressures from expensive liquid-cooling systems and increased competition could weigh on profitability in the near term.
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