Feb 10 – Super Micro Computer (SMCI, Financial) shares surged 7% today as investor optimism meets strategic progress ahead of its Q2 FY25 earnings announcement on February 11. Analysts project earnings per share at $0.61 on revenue, reaching $5.77 billion, fueling a broader rally that has seen SMCI climb over 56% in the past three months. The tech firm’s upward trajectory is underpinned by rapid technological advancements and a high-profile collaboration with Nvidia (NVDA, Financial), bolstering its position in the competitive AI landscape.
However, accounting challenges still continue, as SMCI fails to file its financial reports and has been warned by Nasdaq that it must report on February 25 or risk delisting. While market watchers call for a spiking of revenue forecasts from $14.9 billion in FY24 to an expected $24.49 billion in FY25, there is uncertainty in regulatory compliance. Nvidia has grown to a price target of $40, says Ananda Baruah of Loop Capital Markets, who raised the price target following comments that Nvidia intends to see growth drivers like the possible ramp-up through of its next generation of AI chips, Blackwell.
Options traders also anticipate a significant move after earnings (20 per cent in either direction). It is an area for investors to find balance between growth potential and attendant risks in this dynamic tech space. Market uncertainty remains a concern.
This article first appeared on GuruFocus.
