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Super Micro Computer (SMCI) is trading down 1% today, tracking weakness in the broader market despite a bullish note from Loop Capital. Earlier, the brokerage firm reiterated a “Buy” rating on SMCI stock, encouraged by its involvement in Nvidia's (NVDA) Blackwell ramp.
SMCI stock also scored a price-target hike to $40 from $35, even as Loop analyst Ananda Baruah cautioned, “there is some possibility, given Blackwell ramp and Tier 2 purchasing patterns, that getting there isn't a straight line."
Specifically, “we anticipate SMCI could experience a clunky 1HCY2025, at least until May/June when key Tier 2 customers begin getting GB200 allocation," explained Baruah.
Loop Capital is one of the few brokerage firms with a “Buy” rating on SMCI. The majority of analysts in coverage currently maintain a "Hold" rating on the stock, with major firms including Goldman Sachs and JPMorgan among those advising caution.
That’s because Super Micro Computer has been embroiled in controversy following allegations from Hindenburg Research regarding accounting irregularities, which led to a sharp decline in SMCI’s stock price. These concerns were further compounded by management’s delay of its fiscal 2024 financial filings and the resignation of Ernst & Young as SMCI’s auditor, raising fears of a potential Nasdaq delisting.
The recent closure of Hindenburg Research has provided a temporary boost to SMCI's stock, as investors speculate on upside related to the unwinding of short positions. That said, February should provide some key tests for Super Micro stock bulls, with the company facing a critical deadline to maintain its Nasdaq listing status - and expectations running high for the release of quarterly earnings results, too.
SMCI is down 72% from its 52-week high, set last March, and has lost more than 26% of its value over the past year. The stock’s Bollinger Bands have narrowed considerably in recent sessions, with SMCI consolidating in a relatively tight range after its latest explosive price move.
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