Rosenblatt Securities (Rosenblatt) reaffirms its 'buy' rating on Supermicro Computer (Super Micro Computer, SMCI), maintaining a target price of $51. The firm believes that Supermicro's appointment of former Western Digital Chief Financial Officer (Mark Long) as the new CFO is an important catalyst for restoring investor confidence and reducing corporate governance discounts. With the successful completion of the 2026 fiscal year financial statement audit and the rectification of internal control issues, market attention is expected to shift back to the company's growth, gross margin, and cash flow performance.
The new CFO has rich experience and is expected to contribute to the restoration of valuation.
Mark Long has decades of experience in financial management in the technology industry, covering areas such as corporate strategy, mergers and acquisitions, and capital markets.
He served as the Chief Financial Officer of Western Data from September 2016 to May 2019 and was responsible for overseeing the business integration after the company's acquisition of SanDisk ( SanDisk ).
Rosenblatt believes that the addition of Long will help to enhance investors' confidence in the financial management and corporate governance of ultra-microcomputers. As progress is made in financial auditing and internal control improvements, the valuation discount associated with corporate governance in the past is expected to narrow further.
AI Orders exceed $60 billion, NVIDIA Vera Rubin The platform will drive growth
Rosenblatt pointed out that ultra-microcomputers have currently received over $60 billion in new AI orders from more than 20 customers, indicating that its AI server and infrastructure business has strong demand support.
In addition, the institution expects that with NVIDIA's new generation of Vera Rubin platform starting to be mass-produced in the quarter of January next year, ultra-small computers are poised to enter a new period of product growth.
Earnings expectations are also continuously improving. Rosenblatt pointed out that market expectations for the company's earnings have risen by about 30% in the past three months, reflecting that investors' judgment of future performance is improving.
Target price of $51; the previous drop to $25 is considered an overreaction.
Rosenblatt maintains a target price of $51, with the valuation based on approximately 10 times its forecast for earnings per share in fiscal year 2027.
The institution believes that the stock price of UltraMicro Computer fell to $25 due to concerns related to financing, and that the market reaction was excessive.
The main factors supporting its buy rating include: AI server technology competitiveness, new orders exceeding $60 billion, the Vera Rubin platform about to see significant growth, continuously upward revised profit forecasts, and a significant reduction in corporate governance risks.
Rosenblatt expects that as financial governance issues gradually fade from the focus of investors' attention, the valuation of ultra-microcomputers will depend more on the actual performance of AI order conversion, gross margin improvement, and earnings growth.
