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Super Micro Computer (SMCI) shares are rallying on Wednesday even though the artificial intelligence (AI) server specialist’s fiscal Q3 revenue missed consensus estimates by more than $2 billion.
Investors are cheering SMCI primarily because management guided for at least $0.65 in earnings per share (EPS) on up to $1.5 billion in revenue for Q4, both handily above Wall Street expectations.
The post-earnings rally helped Super Micro rip through its 100-day moving average (MA) on May 6, indicating bullish momentum could sustain in the days ahead.
At the time of writing, SMCI stock is hovering near its year-to-date high of $34.38.
Rosenblatt Raises Price Target on Super Micro Stock
While SMCI shares are already up roughly 60% versus their recent low, Rosenblatt Securities believes they will push higher from here as the year unfolds.
Analysts at the firm were encouraged by SMCI’s improving gross margin, which came in at 10.1% – a massive leap from 6.4% in the second quarter, with expectations of a near-term return to the low-teens percentage range.
Moreover, the company’s Direct Liquid Cooling (DLC) and “AI factory” building blocks are major drivers for long-term profitability, they told clients in a research note dated May 6.
All in all, Rosenblatt now sees SMCI hitting $40 a share this year on the back of continued demand for artificial intelligence infrastructure.
SMCI Shares Remain Attractively Priced in 2026
Beyond margin recovery and impressive guidance, SMCI shares’ long-term value proposition lies in the company’s role as the premier one-stop shop for AI infrastructure.
The Nasdaq-listed firm is evolving from a server manufacturer to a Total IT Solutions specialist, which significantly increases customer stickiness.
By integrating networking, storage, and proprietary liquid cooling software at the rack level, SMCI is capturing a larger share of the capex from Tier-1 cloud providers and sovereign AI projects.
Still, Super Micro is going for less than 15x forward earnings currently — a huge discount compared to its artificial intelligence peers.
In short, with a solid backlog of high-value AI orders and a history of closing May, June, and July in the green, Super Micro Computer remains an attractive pick for long-term investors.
How Wall Street Recommends Playing Super Micro Computer
Heading into the Q3 release, Wall Street had a consensus “Hold” rating on Super Micro stock with a mean price target of $33.33.
However, it’s reasonable to assume that upward revisions will follow now that SMCI has posted a stellar earnings report.
