SMCI Stock Surges Back To Pre-Indictment Levels: Wall Street Piles In With Price Target Hikes After Strong Outlook

• SMCI gained 25% on Wednesday.
• SMCI’s third-quarter revenue and adjusted profit, which rose multi-fold, came in below analysts’ expectations; Q4 forecasts were better than expected.
• Stocktwits sentiment for SMCI remained ‘extremely bullish’ for a second day after the results.

Super Micro Computer, Inc.'s stock surged 25% on Wednesday, its best session in over five months, as a string of analyst price target hikes followed the company's quarterly results the previous evening. The move was notable as fiscal third-quarter revenue and profit both rose sharply but still fell short of analyst expectations; yet it was the stronger-than-expected fourth-quarter outlook that carried the day.

SMCI Smuggling Controversy Overhang Eased?

The rally also marks a symbolic milestone. In March, U.S. authorities charged one of SMCI's co-founders and two other individuals with illegally smuggling AI servers to China. The company denied any involvement and said the accused had operated independently.

Still, investors weren't immediately convinced, and the stock shed roughly a third of its value in a single session. Wednesday's gain has now brought SMCI back to pre-indictment levels, with the stock up about 70% since March 20 lows.

Analysts Bump SMIC PT

CJS Securities upgraded the SMCI stock to ‘Market Perform’ from ‘Underperform,’ according to the Fly. Goldman Sachs raised the price target to $30 from $27, Morgan Stanley to $32 from $28, and Citi to $31 from $25. Goldman Sachs retained its ‘Sell’ rating, while the other two kept the neutral ratings.

Raymond James, which kept a ‘Buy’ rating and bumped the price target sharply to $45 from $35, said the mixed Q3 print featured a revenue miss driven by cloud customer push-outs, offset by materially stronger gross margins due to a favorable mix and lower-than-expected costs.

SMCI Results Recap

The AI server maker's sales more than doubled to to $10.24 billion from $4.6 billion a year earlier, missing Wall Street’s expectations of $12.39 billion. Adjusted earnings increased over four times to $0.72 per share from $0.17.

Super Micro expects sales of $11 billion to $12.5 billion for its fourth quarter and adjusted earnings per share of $0.65 to $0.79 a share. Analysts were expecting sales of $11.06 billion and adjusted earnings of $0.55 a share.

Retail Extremely Bullish On SMCI

On Stocktwits, the retail sentiment remained ‘extremely bullish,’ unchanged since the company’s quarterly report was published in post-market hours on Tuesday.

“$SMCI Looking super solid. I really think we are looking at another run to $60 within 60-90 days (run up to next earnings) especially if Iran-US conflict is over soon. This earning was as good as I have seen it,” said a trader.

With the Wednesday move, SMCI stock has gained about 70% since March 20, when the U.S. indictment shaved one-third of its value in a single day. Year-to-date, the stock is up 18.4%.

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