Super Micro Computer could see upside if Wall Street reacts favorably to Nvidia’s much-anticipated earnings release, according to Loop Capital. Analyst Ananda Baruah reiterated his buy rating on SMCI shares ahead of Nvidia’s second-quarter earnings announcement Wednesday after the bell. He also maintained his $400 price target on shares, implying nearly 55% upside potential from Tuesday’s close. “SMCI stock could act favorably if NVDA provides constructive Oct Q guidance and a healthy H100 supply narrative,” Baruah wrote in a Tuesday note. Earlier in August, SCMI shares lost more than 20% in a single trading session even after posting an earnings and revenue beat. Analysts were disappointed by the company’s outlook for the 2024 fiscal year, which came in more conservative than expected. Baruah said reports of the company’s demise “have been greatly exaggerated.” The analyst expects SMCI could post potentially $2.3 billion in revenue for the September quarter. He added that the company’s September-quarter guide is “created conservatively” to account for the potential of a “soft-case scenario timing” regarding revenue recognition, not for demand. “In the 36 + months we’ve covered SMCI they have consistently demonstrated an understanding of the benefits to exceeding their revenue guidance,” said Baruah. Shares remain up 239% year to date. The stock gained an additional 8.9% Wednesday morning. —CNBC’s Michael Bloom contributed to this report.
