Citi Updates SMCI to $52 PT, Stays Neutral Amid AI Optimism, Margin Concerns

Super Micro Computer, Inc. (NASDAQ:SMCI) is a Must-Watch AI Stock on Wall Street. On July 11, Citi analyst Asiya Merchant raised the price target on the stock to $52.00 (from $37.00) while maintaining a “Neutral” rating.

The firm quoted improving demand for AI servers and the ramp of Nvidia’s GB200/300 platforms, which started shipping in May, behind the price target adjustment. The company’s management is optimistic about turning current deals into real orders over the next two quarters. With Blackwell GPU supply improving, Merchant believes SMCI will find it easier to deliver products and grow its sales.

“Management sounds constructive on materialization of current commitments over the next two quarters as Blackwell GPU supply constraints ease.”

 However, she has also cautioned on accelerating competition coming from Dell and HPE.

 “We remain concerned on margins given increased momentum and competitive efforts by DELL and HPE, which we believe will temper margin expansion expectations.”

Citi Updates SMCI to $52 PT, Stays Neutral Amid AI Optimism, Margin Concerns

This pressure can make it difficult for SMCI to grow its margins regardless of rising sales.

The firm also pinpointed focus zones for investors:

“1) Global manufacturing footprint amidst tariff implications; 2) Hopper to Blackwell GPU platforms transition; 3) Ability (OTC: ABILF) to deliver on their first-to-market advantage for new GPU platforms amidst increased competitive environment; and 4) DCBBS and DLC 2 emergence and ramp into 2H.”

Super Micro Computer, Inc. (NASDAQ:SMCI) designs and manufactures high-performance server and storage solutions for data centers, cloud computing, AI, and edge computing worldwide.

While we acknowledge the risk and potential of SMCI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMCI and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.