There is still considerable resistance standing in the way of the technology sector in the United States, as some bearish analysts argue that the current state of trade tariffs hinders their ability to accurately forecast future growth prospects and valuations. However, there is one stock that has managed to position itself among the winners in this space today, regardless of how President Trump works to implement new trade strategies.
[content-module:CompanyOverview|NASDAQ: SMCI]Shares of Super Micro Computer Inc. (NASDAQ: SMCI) have largely dispelled the bearish views that were once effectively priced into the stock, reflecting expectations of worsening conditions moving forward. With this in mind, investors are offered a compelling risk-to-reward setup in this stock, benefiting bulls who believe that the expansion of artificial intelligence is not yet over.
Considering that these pessimistic views are being actively disproven, investors can now make the connection between NVIDIA Co. (NASDAQ: NVDA) and its new Blackwell solutions technology. As the leader of the semiconductor and chipmaking names proves to the market why it has earned a place in most portfolios, there is an indirect benefit that also appears in the financials of Super Micro Computer.
A Winning Step for Super Micro Computer Bulls
Over the past 12 months, Super Micro Computer has had to overcome some of the worst negativity in the stock market, where the company was once accused of potential financial fraud due to certain accounting practices that sent its price crashing down, spelling trouble for all shareholders.
However, the company successfully proved these views wrong. No further delays in financial reporting have occurred recently, and a new accounting and auditing team has been implemented to help regain the market’s confidence for the future.
These are old news, though, and even though they have mostly cleared the clouds for Super Micro Computer to make new highs, investors now need to focus on the current news cycle to find a catalyst that might take the stock to its former glory in the coming months and quarters.
One major step in terms of confidence and proof of product adoption and quality is that the Saudi government has decided to call on Super Micro Computer for its services to help the nation develop its artificial intelligence infrastructure through data centers. If that wasn’t enough, a new breakout hasn’t yet been baked into financials and valuations.
After beating on revenues and earnings for the quarter, NVIDIA’s demand for its leading Blackwell chips created a new vacuum to be filled in terms of data center maintenance demand; that is exactly where Super Micro Computer comes into play.
Gold or Shovels?
The race to develop the most powerful chips to win the artificial intelligence leadership can be compared to the proverbial gold rush of times past, which is where investors need to start looking for the equivalent of shovels.
Shovels are considered the most lucrative and stable business to play whenever a gold rush comes into the market. In terms of Super Micro Computer, its leading liquid-cooling technology can be seen as a shovel to help companies like NVIDIA and other semiconductor leaders mine for more gold in the coming months.
[content-module:Forecast|NASDAQ: SMCI]Therefore, any success (as is now evident) coming from NVIDIA stock can be directly translated into future success for a name like Super Micro Computer, and this is a theme that some on Wall Street had seen coming from a mile away.
As of early May 2025, perhaps in anticipation of a good NVIDIA quarter, Northland Securities analyst Nehal Chokshi decided to set a new target for the stock at a high of $59 per share, calling for as much as 49% upside from where the stock trades today.
Given that this view hasn’t changed and the primary thesis behind NVIDIA’s success has already been realized, it is likely that others on Wall Street may follow suit and upgrade their views on Super Micro Computer as well. Considering that the stock still trades at only 41% of its 52-week high, this presents an opportunity for investors to take advantage of a favorable risk-to-reward ratio.
Moving forward, investors can expect this name to catch up to the success seen in other semiconductor names, such as NVIDIA, reflecting the developments taking place under the hood of these hot businesses in today’s market.
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