Super Micro Computer Inc (NASDAQ: SMCI) is extending gains this morning after the AI server company confirmed it has started high-volume shipments of its Nvidia Blackwell Ultra solutions.
In a press release today, SMCI chief executive Charles Liang touted the company’s commitment to delivering “pre-validated, plug-and-play solutions at system, rack, and data centre scale.”
The announcement arrives as investors cheer Supermicro’s expanded AI infrastructure offerings – which now include more than ten SKUs optimised for Blackwell GPUs.
While SMCI shares seem to be riding the AI wave again – history suggests caution is warranted in buying Super Micro stock today.
Why did SMCI stock rally on Nvidia news today?
Investors are cheering the aforementioned announcement since the latest Nvidia Blackwell Ultra solutions promise rapid deployment for training inference, and multimodal application – key areas in the AI arms race.
According to Super Micro Computer, its “GB300 NVL72” rack reportedly delivers 1.1 exaFLOPS of FP4 compute – while the HGX B300 system boasts up to 7.5x the performance of its Hopper-based processor.
The news is positive for SMCI stock because it confirms the company is indeed at the forefront of the AI server market.
Beginning high-volume deliveries of Nvidia’s advanced solutions showcases Supermicro’s capability to quickly deliver cutting-edge technology to customers.
This positions the San Jose-headquartered firm to capture significant market share in fast-growing artificial intelligence infrastructure space.
The “pre-validated, plug-and-play” aspect also addresses key customer pain point like deployment complexity, giving SMCI a competitive advantage and signaling strong future revenue potential.
Risks of owning Supermicro shares in 2025
Despite the bullish optics, SMCI remains a risky bet. The company has a history of overpromising and underdelivering – most notably cutting its full-year revenue guidance from $40 billion to $33 billion just months ago.
Gross margins have also deteriorated, slipping below 10% amid rising competition and aggressive pricing strategies.
While Supermicro shares are currently going at a forward price-to-earnings (P/E) ratio of about 21, much lower than Nvidia stock, the AI firm’s valuation, nonetheless, looks stretched given its inconsistent earnings and governance concerns.
Earlier this month, Super Micro Computer acknowledged continued inadequacies in its financial reporting practices, adding that its remedial measures could fail to fully address the issue or prevent future lapses.
Therefore, while Blackwell ramp may offer short-term upside, the long-term fundamentals remain shaky.
Investors should also note that SMCI stock operates in a commoditized server market, where rivals like Dell and HPE offer broader ecosystems and deeper supply chain advantages.
In short, Super Micro’s rally today may be more about hype than substance.
How Wall Street recommends playing SMCI shares
Supermicro’s alignment with NVIDIA’s Blackwell rollout has reignited investor enthusiasm, but the underlying risks haven’t disappeared.
That’s why Wall Street analysts currently rate SMCI shares at “hold” only, with their mean target of nearly $47 reflecting a lack of meaningful upside from here.
So, the prudent move, at least for now, may be to lock in profits in Supermicro stock and wait for clearer signs of durable growth before jumping back in.
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