Super Micro Poised for Upside, Wells Fargo Says

Super Micro Computer poised for upside preannouncement, according to Wells Fargo: Super Micro, a server company and AI play, could issue a positive announcement ahead of its early August earnings for its fiscal fourth quarter, potentially offsetting its third-quarter revenue miss.

• Wells Fargo analysts, led by Aaron Rakers, note that Super Micro has historically either preannounced or published its earnings release date around 19 days after the close of its quarterly results.
• Improved investor sentiment and the stock’s valuation boost optimism for a possible upside preannouncement late next week.
• Super Micro’s shares have more than tripled this year, climbing 215%, as analysts tout the company as a back-door play on artificial intelligence due to its AI systems, GPU servers, and long-standing partnership with Nvidia.

Competitive landscape and earnings expectations: Wells Fargo maintains an equal weight rating and $890 target price on Super Micro ahead of the earnings release, with a bull case target of $1,200, suggesting 34% upside potential.

• Rakers is confident Super Micro can return to gross margins above 14% despite intensifying competition in the AI server market.
• The company is expected to emphasize its direct-liquid cooling expansion, provide inventory updates, and potentially discuss capital spending and fundraising needs.
• However, Wells Fargo cautioned about concentration risk, with an estimated 5-7% of Super Micro’s unit shipments accounting for around 60% of revenue.

Broader implications: Super Micro’s anticipated upside preannouncement and strong stock performance highlight the growing investor interest in AI-related plays, particularly those benefiting from the ongoing AI server investment cycle. However, the competitive landscape remains a key factor to monitor, as traditional vendors and original design manufacturers increasingly focus on the AI server market.