Super Micro Computer’s Liquid-Cooling Technology Increases Rack Compute Power By Over 2x, Claims An Analyst

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Super Micro Computer (NASDAQ: SMCI), a prominent retailer of servers and AI racks, is widely considered a leader in liquid-cooling technology that has become an integral requirement for deploying servers in a dense configuration. Now, one analyst has crunched the numbers to quantify just how critical SMCI’s liquid-cooling tech is to efficient rack computing.

To wit, Rosenblatt analyst Kevin Casssidy has now resumed his coverage of Super Micro Computer with a ‘Buy’ rating and a 12-month stock price target of $60.

To justify his prediction of a ~60 percent surge in Super Micro Computer’s share price over the next 12 months, Cassidy notes that the company “has benefited from the emerging importance of generative AI themes as investors have started to appreciate the company’s inherent innovation, design, deployment, and manufacturing scale capabilities.”

What’s more, as per Cassidy’s assessment, Super Micro Computer now draws a whopping 70 percent of its revenues from AI use-cases, highlighting the company’s role as an effective proxy for the ongoing AI gold rush.

The Rosenblatt analyst goes on to note:

“Supermicro’s long history in “Green” computing, building block architecture (BBA), plug-and-play, Twin architecture, rack scale integration, and S/W platform optimization have resulted in a formidable business model aligned with the critical factors for success in an AI-driven world where time-to-market, TCO optimization, scale, and reliability are of upmost importance.”

Critically, as mentioned earlier, Cassidy views SMCI’s liquid-cooling tech as a “competitive advantage,” especially due to the technology’s inherent challenges, including “complexity, expense, and reliability concerns (leaks or droplets).”

Finally, the analyst claims that Super Micro Computer’s liquid-cooling technology can increase rack computing power by over 2x:

“Supermicro’s liquid cooling technology, at scale, can increase rack compute power by over 2x, which we see as a disruptive dynamic in a power-constrained data center.”

Of course, as we noted recently, Super Micro Computer shares have endured sizable weakness recently, not only in affinity with NVIDIA’s share price plunge, but also due to its disappointing near-term guidance, which now entails fiscal Q3’25 (March-ending quarter) revenue of between $5 billion and $6 billion, corresponding to a QoQ decline of ~6 percent at the low-end, and a QoQ increase of ~12 percent at the high-end of the range.

SMCI, however, was able to limit the fallout by aggressively ramping up its projections for FY 2026, now expecting to earn $40 billion in FY 2026 vs. Wall Street’s previous consensus estimate of just $29 billion.

Bear in mind that NVIDIA and CoreWeave are Super Micro Computer’s biggest customers, while Dell is its biggest competitor.