TLDR
- Super Micro Computer (SMCI) stock has gained 12.08% in 2025 after dropping 64% in 2024
- The company expects revenue to reach $23.5-25 billion in fiscal 2025, showing 62% growth
- SMCI’s direct liquid cooling technology designed for Nvidia’s Blackwell GPUs provides competitive edge
- The company has addressed accounting concerns with an audited 2024 annual report
- Analysts see 45.49% upside potential for SMCI stock despite higher P/E ratio than competitor Dell
Super Micro Computer’s stock is making a comeback in 2025. The server manufacturer has seen its shares rise 12.08% since January after a brutal 64% decline throughout 2024.
Billionaire investor Ken Griffin’s Citadel Investment Group has taken notice. The hedge fund holds a $58.9 million stake in SMCI as part of its $577.87 billion portfolio.
The rebound comes as artificial intelligence continues transforming the global economy. High-performance data centers form the backbone of this revolution, and SMCI supplies crucial hardware components.
SMCI specializes in server racks that house and cool graphics processing units (GPUs). These chips have become essential for running AI workloads.
Technology That Beats The Heat
The company’s standout advantage is its direct liquid cooling (DLC) technology. This innovative approach cools GPUs with liquid rather than air.
SMCI’s cooling systems use 80% less space than traditional methods. Customers can save approximately 40% on their energy bills with this technology.
The company designed its DLC systems specifically for Nvidia’s new Blackwell GPU architecture. This strategic alignment positions SMCI to benefit directly from Blackwell GPU sales.
SMCI’s U.S. manufacturing presence has become increasingly valuable. As trade tensions rise under President Trump, companies are prioritizing domestic suppliers for critical infrastructure.
The current administration has imposed 25% import duties on steel and aluminum. Griffin has expressed concern about these policies, saying they make it difficult for multinationals to plan long-term investments.
Despite these macroeconomic headwinds, SMCI’s business continues to thrive. The company reported $5.7 billion in revenue for the second quarter of fiscal 2025.
Growth Trajectory Remains Strong
This revenue figure represents a 55% increase over the same period last year. For the third quarter, management forecasts revenue between $5 billion and $6 billion.
Looking at the full fiscal year 2025, SMCI expects revenue to reach between $23.5 billion and $25.0 billion. This projection implies 62% year-over-year growth.
The company has even more ambitious plans. SMCI sees a pathway to $40 billion in revenue by next year as it expands production capacity and market adoption grows.
Wall Street analysts are predicting a 17% increase in adjusted earnings per share this year to $2.59. As of April 11, analysts see an upside potential of 45.49% for the stock.
SMCI’s growth story has attracted institutional investors. The company’s stock is currently held by 45 hedge funds, showing strong professional interest.
Rebuilding Trust After Turbulence
SMCI’s journey hasn’t been without challenges. In 2024, the company faced a U.S. Department of Justice accounting investigation.
During this period, SMCI’s auditor resigned due to governance concerns. These events created uncertainty around the company’s financial reporting practices.
The company has made progress addressing these issues. SMCI released an audited 2024 annual report to restore investor confidence.
An independent special committee also cleared the company of misconduct allegations. Some uncertainties remain, including possible DOJ sanctions, but the worst appears to be behind them.
The current investment case for SMCI centers on this recovery story. Investors who believe the company has overcome its accounting troubles see potential for continued growth.
The stock trades at a forward price-to-earnings ratio of 14.3. This valuation is higher than competitor Dell Technologies (DELL), which trades at a forward P/E of 9.2.
Despite the premium valuation, many analysts believe SMCI offers stronger growth prospects. The company’s specialized focus on AI infrastructure hardware gives it an edge in a rapidly expanding market.
