Super Micro Computer Inc. (NASDAQ: SMCI) stock has its bullish supporters, some of whom feel it can withstand global trade issues and that it may be one of the best artificial intelligence (AI) stocks going forward. But it is also a target of short sellers, with more than 17% of shares held short. In the past month, Supermicro shares stumbled after it posted disappointing fiscal first-quarter results with sinking gross margins. A director sold a significant number of shares in late November. However, management provided an ambitious full-year fiscal 2026 revenue outlook.

While the artificial intelligence-fueled tech rally sputtered when tariff concerns grew, it seems to have resumed. Companies that can diversify to address the many demands the industry faces ultimately are poised to profit. Supermicro is one of those companies. The San Jose-based tech firm specializes in high-performance and high-efficiency servers, but it also provides software solutions as well as storage systems for data centers and enterprises focused on cloud computing, AI, 5G, and edge computing.

AI stocks in general have felt the effects of trade war concerns, and Supermicro’s margins have come under pressure. It aims to shrink its margins to increase production capacity to meet demand. Earlier in the year, the company said it was expanding its manufacturing capacity in the United States, Taiwan, and Europe to meet increasing demand, particularly for liquid-cooled data center solutions. Recently, Supermicro announced collaborations with Ericsson and others, as well as an expansion of its solutions designed for Nvidia Blackwell Architecture to the European market.

Some analysts continue to expect big upside potential for the tech stock. Hindsight is 20/20, and all that matters now is how Supermicro will perform going forward. So, 24/7 Wall St. has undertaken analysis to provide investors—and potential investors—with an idea of where this stock could head over the next five years.

Shares of Supermicro have been particularly rewarding to shareholders in the recent past, as they exploded by gaining 3,096% in the five years between August 2019 and August 2024. The following table summarizes its share price, revenues, and profits (net income) from 2014 to 2024:

In the past decade, Supermicro’s revenue grew by more than 385% while its net income increased by just over 1,085%. Despite a minor revenue contraction of 4.6% in 2020, Supermicro’s shares still increased year-over-year due to continued growth in net income. As the IT services provider looks forward to the second half of the decade, we have identified two key drivers that are likely to have an impact on its growth metrics and stock performance.

Key Drivers of Supermicro’s Stock Performance

Enormous Industry Growth

According to Statista, global revenues generated by the IT services industry are $1.420 trillion. Looking forward, that figure is forecast to balloon to $1.879 trillion worldwide by the end of 2029, which is good for a market increase of 32.32%. Most of this growth will be driven by demand for services and solutions that support AI. Yet, other drivers include digital transformation and cloud IT infrastructure, both of which are major business segments for Supermicro. The company has a global reach, with more than half of its revenue being produced from outside of the United States, meaning it will play a central role in meeting that global growth demand.

Shrinking Margins to Increase AI Production Capacity

Supermicro finished the fiscal year 2024 with a sizable reduction in its margins. And while investors would usually interpret that negatively, it makes perfect sense for the company. In 2024, gross margins shrank to 14.2% from 18.1% in fiscal 2023. The main driver is increasing production of its server solutions to deploy AI graphics processing units (GPUs), like those produced by tech behemoths Nvidia and Advanced Micro Devices Inc. (NASDAQ: AMD).

As a result, the company is positioning itself for growth alongside increased demand for GPUs, which ultimately will cause Nvidia and AMD’s successes to trickle down to Supermicro. Most recently, over 75% of Supermicro’s revenue was from sales of its GPU server solutions for AI implementation. The market for direct liquid cooling (DLC) servers—which Supermicro provides—is expected to grow from $5 billion in 2024 to $21 billion in 2029.

Supermicro Price Prediction in 2025

The consensus median one-year price target for Supermicro has fallen to $48.53. However, that is 42.7% higher than the current share price. Nineteen analysts covering Supermicro stock have a consensus Hold recommendation. Just eight of them have Buy ratings.

24/7 Wall St. projects Supermicro’s stock price to be $52.04 at year’s end, based on projected earnings of $3.35 per share in 2025. That target would be about 53% higher than the current share price.

How Supermicro’s Next Five Years Could Play Out

At the end of 2025, we expect to see revenue, net income, and EPS rise by 89.16%, 63.41%, and 70.08%, respectively. As mentioned, that would result in a per-share price of $52.04 on a post-split-adjusted basis, which is about 53% higher than where the stock currently trades.

When 2026 concludes, we estimate the share price to be $67.25. This is based on modest revenue gains, an assumed EPS of $44.37, and a healthy projected P/E ratio of 18.

At the conclusion of 2027, we forecast a sizable jump in the stock price to $89.01, driven by $37.116 billion in revenue and $1.458 billion in net income.

By the end of 2028, we expect shares to trade at $99.00, on revenues of $42.631 billion, net income of $1.881 billion, and an EPS of $67.60.

And at the end of 2029, Supermicro is forecast to achieve revenue of $50.154 billion and net income of $2.428 billion. That results in a per-share price of $108.90.

By the end of 2030, we estimate an SMCI share price of $116.60, good for a 242% or so increase over today’s share price, based on an EPS of $106.62 and a P/E ratio of 13.

Here is a look at how it gets there: