Supermicro (SMCI) Target Raised by Citi as AI Demand Heats Up

July 11 Shares of Super Micro Computer SMCI dipped nearly 1% lower on Friday morning despite multiple analyst actions, including a price target hike from Citi.

Citi lifted its price target on SMCI to $52 from $37 while keeping a Neutral rating. The brokerage cited growing enterprise and sovereign demand for AI-focused infrastructure and noted the company's ongoing efforts to meet its near-term delivery goals. The updated valuation reflects a shift to a 13.5x earnings multiple from the prior 9x to 10x range.

The analysts flagged a broader ramp-up in Supermicro's GB200 and GB300 products that began in May. While AI and server market tailwinds persist, Citi warned that intensifying competition from Dell Technologies DELL and Hewlett Packard Enterprise HPE could pressure profit margins.

Separately, Mizuho also raised its price target to $47 and reiterated a Neutral stance, citing robust cloud and AI server orders. Meanwhile, KeyBanc initiated coverage with a Sector Weight rating, noting the competitive dynamics in the space.

Earlier this week, SMCI priced $2 billion in convertible senior notes due 2030, with a $300 million greenshoe option. Proceeds will support general corporate purposes and growth plans. The company also received immersion cooling certification for its BigTwin server from Intel INTC.

Investors remain cautious ahead of SMCI's earnings report expected in early August.