According to the Wise Finance APP, Loop Capital released a research report, lowering the target price of Super Micro Computer (SMCI.US) from $1500 to $1000, a decrease of almost 33.33%, but still maintaining a "buy" rating.

Analyst Ananda Baruah pointed out that they lowered the target price because the company is working to restore the gross margin/operating margin to 14%/10% and address the situation regarding the delayed submission of the 10-K report.

Baruah stated: "In other words, we believe the assumption that Super Micro Computer is about to collapse has been exaggerated, and its importance for generative ai servers has been underestimated."

The analyst pointed out that Super Micro Computer's normalized revenue is expected to exceed $40 billion. Conversations with clients indicate that with Nvidia's new GPU Blackwell, Super Micro Computer's gross margin and operating margin are expected to recover to above 14% and 10%, respectively.

This analyst believes that a normalized EPS of $50 is meaningful. Loop also believes that with such revenue (growth) and profit margins, Super Micro Computer will once again achieve a market multiple of at least 20 times.

Last month, Super Micro Computer stated that they were unable to submit the annual 10-K report on time. This sparked strong reactions from investors and analysts.

Baruah stated that while acknowledging that super micro computer may need to submit a 10-K before investors can establish new core positions on a large scale, Loop presented several 'assumption' scenarios, including the following:

What will happen if super micro computer's revenue does not reach $30 billion in the 2025 fiscal year? (This implies significant upside potential). The analyst added that if the gross margin rises above 14% in the next four quarters, with operating margin exceeding 10%, what will happen?

Baruah indicated that their cooperation with customers suggests that throughout the Blackwell cycle (Loop indicated will now extend into most of the 2026 calendar year), super micro computer remains the primary preferred supplier for original equipment manufacturers (OEMs).

This also indicates that while there are now more generative artificial intelligence server suppliers, including original design manufacturers (ODMs) involved, they do not provide the same high-margin services as super micro computer (such as rack integration and debugging), and ODMs' ability in this regard does not meet the third-party requirements.

Furthermore, Baruah pointed out that this indicates customers currently believe that paying an additional gross margin of 200 to 300 basis points to super micro computer is a possible outcome of Blackwell, which would bring the gross margin back to above 14%.

In other 'assumptions,' the analyst stated that if pricing of similar generative artificial intelligence servers itself is not more aggressive, does this mean that if the products shipped in June by super micro computer use air cooling instead of liquid cooling, the company's gross margin in the June quarter would be at a more typical level?