Super micro computer (SMCI -1.27%)) completed a stock division of 10 per 1 in October 2024, and Arista networks (Anet -1.28%)) finished a stock division 4 per 1 in December 2024. It is interesting to note, none of the actions beat the S&P 500 (Snpindex: ^ GSPC) Since the divisions were announced, which is somewhat atypical.
Since 1980, the actions that have separated have offset the reference index on average of 13 percentage points during the year following the announcement. However, some Wall Street analysts anticipate large gains for Supermicro and Arista shareholders in the next 12 months, as detailed below:
- Ananda Baruah, at Loop Capital, recently increased the target price on Supermicro to $ 70 per share, which involves 105% of the current action of $ 34.
- Ryan Koontz in Needham recently reiterated its target price on Arista at $ 145 per share, which at 85% involved the current share of the $ 78 action.
Here is what investors should know about these artificial intelligence actions.
Super micro computer: 105% on the rise involved by the target price of loop capital
Super Micro Computer builds servers of data centers, including servers racks cooled by liquid optimized for artificial intelligence (IA). Internal manufacturing capacities and a modular approach to product development have helped the company obtain a management position in AI servers, a forecast of the market to increase to 30% per year until 2033, according to Statita.
Last year, Hans Mosesmann in Rosenblatt wrote: “Super micro developed a very, very quick model to market.” Due to its use of current electronic construction blocks on different product ranges, which can quickly be assembled in servers with various specifications, the company also has the widest product portfolio when Nvidia,, DmlaOr Intel releases a new chip.
However, other analysts argue that there is nothing unique or innovation about Supermicro. The company simply builds servers with fleas and equipment purchased from other suppliers. “Super microphone does not really make innovation. They are a contractual manufacturer with the desire to commit the working capital. Most of the innovation is done upstream,” said Mehdi Hosseini in Susquehanna.
Supermicro recently found compliance with the NASDAQ deposit requirements. Last year, an open seller accused the accounting manipulation company, starting a series of events that delayed its 10-K form for financial year 2024 and forms 10-Q for the first and second quarters of the 2025 financial year. However, the audit did not discover any evidence of fraud or misconduct, and the company submitted the forms before the death of February.
The company announced mixed results for the second quarter of the 2025 financial year, which ended in December. Income increased by 55% to $ 5.6 billion, but the gross profit margin contracted 350 base points to 11.8%, which suggests that SuperMicro loses pricing because competition is intensifying on the IA servers market. Consequently, net income (generally accepted accounting principles) was stable at $ 0.51 per diluted part despite strong growth on the upper line.
Wall Street is expecting the company’s revenues to increase 20% per year during the year 2026, which ends in June 2026. This makes the enhancement of 13 times the revenues cheap. Although the argument that Supermicro lacks unique qualities has merit, I also think that the stock is undervalued today. Not as long as triple figures are probably during the next year, but enough for patient investors to consider a small position today.
Arista Networks: 85% on the rise involved by the target price of Needham
ARISTA develops networking solutions for cloud and business data centers. Unlike inherited suppliers, its switches and routers execute a single operating system, which allows customers to deploy a transparent network through public, private and hybrid clouds. It also reduces the cost of possession of the network. This advantage helped Arista guarantee a leadership position on the high -speed data center switching market.
Above all, Arista has a particularly strong presence in the fastest switching categories (that is to say 100 gigabit at 400 gigabit), with more than 3 times the market share of its nearest competitor, Cisco systems. This leaves Arista ideally positioned for the benefit because the AI leads to the demand for increasingly rapid data centers.
Arista reported financial results in the fourth quarter which beat estimates on the upper and lower lines. Turnover increased by 25% to $ 1.9 billion, the second consecutive acceleration and non-Gaap net income increased by $ 25% per diluted share. Meanwhile, the company provided annual directives which involved revenue growth of 17% in 2025.
Arista serves several large technological companies, including Microsoft,, Meta-platforms,, AppleAnd Oracle. It should benefit as these customers build their IA infrastructure. Wall Street expects the profits to increase by 10% in 2025, which makes the valuation of 34 times the dear profits, but I think that the consensus is too pessimistic.
As mentioned, management guided revenue growth of 17% in 2025, referring to growth in similar profits. In addition, Arista beat the consensus estimate on average by 14% in the last six quarters. If that persists, the current evaluation would be reasonable with hindsight. And with Arista Stock 40% reduction, it’s a good time to buy a small position.
Randi Zuckerberg, former Director of Development of the Facebook and Sister of the CEO of Meta Platforms, Mark Zuckerberg, is a member of the board of directors of Motley Fool’s. Trevor Jennewine occupies positions in Arista Networks and Nvidia. The Motley Fool has positions and recommends micro advanced devices, Apple, Arista Networks, Cisco Systems, Meta Platforms, Microsoft, Nvidia and Oracle. The Motley Fool recommends the following options: Long January 2026 Calls $ 395 on Microsoft and Court January 2026 405 $ calls Microsoft. The Motley Fool has a policy of disclosure.
