Super Micro Computer (SMCI) shares slipped more than 6% on Wednesday, May 7 after the AI server giant reported a disappointing fiscal third quarter and lowered its guidance further for the full year. 

SMCI now expects its revenue to fall between $21.8 billion and $22.6 billion in 2025 – well below its recently lowered guidance for up to $25 billion in full-year revenue. 

Super Micro Computer cited “some delayed customer-platform decisions” as it recorded a 53% decline in its per-share earnings to $0.31 in Q3.   

Still, there’s reason to consider capitalizing on the post-earnings weakness in SMCI stock that’s been cut in half since its high in February. 

Why Does SMCI Stock Remain Attractive to Own?

For starters, Supermicro’s poor performance in its fiscal third quarter is not at all a surprise. The company’s preliminary report released in late April already confirmed that it would fall short of its initial estimates in Q3.  

So, it’s reasonable to believe that a disappointing third quarter is already priced into SMCI stock at the time of writing. 

Plus, the “delayed customer-platform decisions” that Super Micro Computer cited for weakness in its recently concluded quarter may not suggest a permanent loss of sales. 

In fact, “many of those commitments are expected to land in the June and September quarters,” revealed Charles Liang, the chief executive of the Nasdaq-listed firm in a press release today. 

This suggests that SMCI may still be on track to meet its long-term targets. 

Needham Sees 25% Upside in Supermicro Shares

According to Charles Liang, the AI server specialist remains strongly positioned to “capitalize on the growing market opportunity.”

His optimism is shared by Needham analyst Quinn Bolton, who resumed coverage of SMCI shares this morning with a “Buy” rating. 

Bolton expects resolution of several overhangs, including delayed filings, to help Supermicro stock hit $39 again by the end of this year. His price target signals potential for more than 25% upside from here. 

Super Micro Computer’s leadership position in liquid-cooled data center technology, together with an unusually attractive valuation at writing, warrants an investment in the AI stock, he added in a research note today. 

Wall Street Hasn’t Thrown in the Towel on SMCI Yet

While the consensus rating on SMCI currently sits at “Hold” only, the mean target of $51 indicates potential upside of 70% from current levels.