Super Micro Computer, Inc. (SMCI)

Super Micro Computer (SMCI) Price Prediction and Forecast

As the artificial intelligence-fueled tech rally continues, companies that can diversify to address the manifold demands the industry faces are poised to profit. Super Micro Computer Inc. (NASDAQ: SMCI) is one of those companies. The San Jose, Calif.-based tech firm specializes in high-performance and high-efficiency servers, but it also provides software solutions as well as storage systems for data centers and enterprises focusing on cloud computing, AI, 5G, and edge computing. Nonetheless, analysts expect big upside potential for the tech stock. Hindsight is 20/20, and all that matters now is how Super Micro Computer will perform going forward. So 24/7 Wall Street has performed analysis to provide investors — and potential investors — with an idea of where shares of SMCI could be headed over the course of the next five years. Key Points in This Article: Super Micro Computer’s future stock performance is being bolstered by explosive demand in the IT services industry. SMCI is shrinking its margins to increase production capacity to meet demand. If you’re looking for a megatrend with massive potential, make sure to grab a complimentary copy of our “The Next NVIDIA” report. This report breaks down AI stocks with 10x potential and will give you a huge leg up on profiting from this massive sea change. Super Micro Computer News and Analysis 11/18/2024 Super Micro Computer’s stock price is up 23.22% today, a surprising rally filed by hopes that the company will soon meet Nasdaq’s listing requirements. However, investors remain cautious as they await the company’s official compliance plan. 11/15/2024 Super Micro Computer’s stock price dropped by 1.8% today. Trading volume was also lower than average. 11/14/2024 Super Micro Computer’s stock continues to decline today. The company declared that it cannot file its 2025 fiscal-year first-quarter earnings on time and has filed a FormNT 10-Q with the Securities and Exchange Commission. 11/12/2024 Super Micro Computer is racing to secure a new auditor after Ernst & Young’s sudden resignation. However, there are few potential firms capable of auditing a company of its size, and an auditor must be secured by the November 16th deadline to avoid delisting from the Nasdaq stock exchange. 11/8/2024 Super Micro Computer’s stock price dropped by 3.1% today, reaching as low as $23.76. Trading volume was also significantly lower than average. 11/7/2024 A new lawsuit alleges that Super Micro Computer executives misled investors with false claims about the company’s financial health. The suit claims that these misleading statements were made before a short seller exposed potential accounting irregularities. 11/6/2024 Super Micro Computer experienced a huge 20% decline in its share price today. This sharp drop was triggered by investor concerns that the company might face delisting from the Nasdaq exchange. 11/5/2024 Super Micro Computer has announced its preliminary financial results for the first quarter of fiscal year 2025. The company expects net sales to be between $5.9 billion and $6.0 billion, falling short of its previous forecast of $6.0 billion to $7.0 billion. 11/4/2024 Super Micro Computer is set to provide a business update on Tuesday, but market attention is primarily focused on the company’s potential delisting from the Nasdaq Stock Exchange. Despite this, the company’s stock price increased by 5.6% today. 11/1/2024 Super Micro Computer is at risk of being removed from the Nasdaq Stock Exchange following the sudden resignation of its auditor, Ernst & Young. The company has been given a deadline of November 16th to submit a plan to regain compliance with Nasdaq listing rules. Super Micro Computer’s Recent Stock Success Shares of SMCI have been particularly rewarding to shareholders in the recent past, as they exploded by gaining 3,096% in the five years between August 2019 and August 2024. The following table summarizes Super Micro Computer’s share price, revenues, and profits (net income) from 2014 to 2023: Year Share Price (pre-split) Revenues* Net Income* 2014 $36.39 $1.467 $.054 2015 $24.66 $1.954 $.092 2016 $28.05 $2.225 $.072 2017 $20.93 $2.484 $.067 2018 $13.90 $3.360 $.046 2019 $24.65 $3.500 $.072 2020 $31.66 $3.339 $.084 2021 $43.95 $3.557 $.112 2022 $82.19 $5.196 $.285 2023 $284.26 $7.123 $.640 *Revenue and net income in $billions In the last decade, Super Micro Computer’s revenue grew by more than 385% while its net income increased by just over 1,085%. Despite seeing a minor revenue contraction in 2020 with a decrease of 4.6%, shares of SMCI still managed to increase year-over-year on still-growing net income. As the IT services provider looks forward to the second half of the decade, we have identified three key drivers that are likely to impact its growth metrics and stock performance. Key Drivers of Super Micro Computer’s Stock Performance Enormous Industry Growth: According to Statista, global revenues generated by the IT services industry are $1.420 trillion. Looking forward, that figure is forecast to balloon to $1.879 trillion worldwide by the end of 2029, which is good for a market increase of 32.32%. Most of this growth will be driven by demand for services and solutions that support AI, but other drivers include digital transformation and cloud IT infrastructure — both of which are major business segments for Super Micro Computer. The company has a global reach, with more than half of its revenue being produced from outside of the U.S., meaning it will play a central role in meeting that global growth demand. Shrinking Margins to Increase AI Production Capacity: Super Micro Computer finished the fiscal year 2024 with a sizable reduction in its margins. And while that would usually be interpreted negatively by investors, it makes perfect sense for the company. In 2024, gross margins shrink to 14.2% from 18.1% in fiscal 2023. The main driver is increasing production of its server solutions to deploy AI graphics processing units (GPUs) — like those produced by tech behemoths NVIDIA Corp. (NASDAQ: NVDA) and Advanced Micro Devices Inc. (NASDAQ: AMD). As a result, the company is positioning itself for growth alongside increased demand for GPUs, which ultimately will cause NVIDIA and Advanced Micro Devices’ successes to trickle down to Super Micro Computer. Most recently, 70% of SMCI’s revenue was from sales of its GPU server solutions for AI implementation. The market for direct liquid cooling (DLC) servers — which Super Micro Computer provides — is expected to grow from $5 billion in 2024 to $21 billion in 2029. Super Micro Computer (SMCI) Price Prediction in 2025 The current consensus median one-year price target for Super Micro Computer is $65.00, which represents a nearly 249.84% potential upside over the next 12 months based on the current share price of $18.01. Of all the analysts covering Super Micro Computer, the stock is a consensus buy, with a 2.38 ‘Outperform’ rating on a scale from 1 (‘Strong Buy’) to 5 (‘Strong Sell’). 24/7 Wall Street’s 12-month forecast projects Super Micro Computer’s stock price to be $68.34 based on a projected EPS of $3.35 in 2025. Super Micro Computer (SMCI) Stock Forecast Through 2030 Year Revenue* Net Income* EPS 2025 $28.265 $1.974 $3.35 2026 $31.634 $2.548 $4.31 2027 $37.116 $1.458 $5.49 2028 $42.631 $1.881 $6.76 2029 $50.154 $2.428 $8.49 2030 $59.005 $3.134 $10.62 *Revenue and net income in $billions How Super Micro Computer’s Next 5 Years Could Play Out At the end of 2025, we expect to see revenue, net income, and EPS rise by 89.16%, 63.41%, and 70.08%, respectively. That would result in a per share price of $683.40 (or $68.34 on a post-split-adjusted basis), which is 3578.15% higher than where the stock is currently trading. When 2026 concludes, we estimate the price of SMCI to be $798.66 (or $79.87 on a post-split-adjusted basis), which is 4198.49% higher than where shares are trading today. This is based on modest revenue gains, an assumed EPS of $44.37, and a healthy projected P/E ratio of 18. At the conclusion of 2027, we forecast a sizable jump in the stock price to $861.28 (or $86.13 on a post-split-adjusted basis) driven by $37.116 billion in revenue and $1.458 billion in net income, which will result in shares trading for 4535.52% higher than the current share price. By the end of 2028, we expect to see shares trading for $1041.04 (or $101.40 on a post-split-adjusted basis), or 5503.01% higher than the stock is trading for today on revenues of $42.631 billion, net income of $1.881 billion, and an EPS of $67.60. And at the end of 2029, Super Micro Computer is forecast to achieve revenue of $50.154 billion and net income of $2.428 billion, resulting in a per-share price of $1188.59 (or $118.86 on a post-split-adjusted basis), which is 6297.15% higher than the stock’s current price. Super Micro Computer’s Price Target for 2030 By the conclusion of 2030, we estimate an SMCI share price of $1386.08 (or $138.61 on a post-split-adjusted basis), good for a 7360.06% increase over today’s share price, based on an EPS of $106.62 and a P/E ratio of 13. Year Price Target % Change From Current Price 2025 $68.34 Upside of 3578.15% 2026 $79.87 Upside of 4198.49% 2027 $86.13 Upside of 4535.52% 2028 $101.40 Upside of 5503.01% 2029 $118.86 Upside of 6297.15% 2030 $138.61 Upside of 7360.06% Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored) Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today. Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month. Click here now to get started. 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