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Super Micro Computer (SMCI) says it’s adding an advanced Intel (INTC) chip, the Xeon 6, to its servers.
Supermicro expects the new integration to help improve performance and efficiency for modern workloads, particularly in areas like artificial intelligence, networking, and edge computing.
Shares of the AI server company rallied more than 10% following the news release on Tuesday, March 11 and are up another 6% at the time of writing on March 12.
Still, a Rosenblatt analyst continues to see significant further upside in SMCI shares from current levels.
How High Could SMCI Stock Fly in 2025?
Rosenblatt analyst Kevin Cassidy initiated Super Micro Computer this week with a “Buy” rating, adding the company’s shares could climb to $60 by the end of 2025.
Cassidy sees another 40% upside in SMCI shares as “AI revenues are now nearly 70% of sales and are accelerating and increasing visibility to 1-2 years.”
The analyst expects Supermicro’s unique architecture and its expertise in “Green” computing to serve as long-term catalysts for its stock price.
Super Micro Computer has the ability to deliver liquid cooling at scale, which Cassidy dubbed a significant “competitive advantage” in his research note on Wednesday.
Supermicro’s Revenue More Than Doubled in 2024
Kevin Cassidy expects the price-earnings multiple on the AI stock to expand moving forward as long as its management continues to hit revenue targets and the company’s margins expand.
In February, the AI server company said its sales more than doubled on a year-over-year basis to $14.99 billion as net income increased by a whopping 80% in 2024.
At the time, the Nasdaq-listed firm also announced plans of upgrading its tech infrastructure and hiring new accounting and audit professionals to address deficiencies in internal controls related to financial reporting.
What’s the Consensus Rating on Supermicro Stock?
Supermicro stock is currently up more than 60% versus its year-to-date low in early February. Still, other Wall Street analysts agree with Rosenblatt and see a similar further upside in SMCI shares.
The consensus rating on the AI stock currently sits at “Hold” but the mean target of $58.50 indicates potential upside of about 33% from current levels.
