Technology hardware firm Super Micro Computer (SMCI) is expanding its business by launching a new service, called Data Center Building Block Solutions, that is designed to help customers build entire data centers through a single vendor. The offering covers everything from GPUs and servers to networking, cooling, and power infrastructure, with the goal of reducing what’s known as “time to online.” For context, this refers to the time it takes from placing an order to having the data center fully operational.
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Super Micro CEO Charles Liang says that the service includes liquid-cooling systems that are designed for today’s most advanced chips. He also explains that these systems can cut data center power usage by as much as 40% compared to traditional air-cooling setups. This is important, especially since the demand for large data centers has exploded with the rise of artificial intelligence. In fact, big tech companies such as Amazon (AMZN), Google (GOOGL), Microsoft (MSFT), Meta (META), and Elon Musk’s xAI (PC:XAIIQ) are building massive facilities across the U.S. to support this growth.
As a result, Super Micro’s stock has climbed 81% year to date, although it’s only up 15% over the past year due to past concerns. More specifically, in late 2024, short-seller Hindenburg Research accused the company of accounting irregularities, and its auditor, Ernst & Young, resigned due to financial control issues. However, in December, an independent review found no wrongdoing by Super Micro’s executives or board.
Is SMCI Stock a Good Buy?
Turning to Wall Street, analysts have a Hold consensus rating on SMCI stock based on five Buys, nine Holds, and three Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average SMCI price target of $45.53 per share implies 16.1% downside risk.
