Mizuho lowered its price target on Super Micro Computer (NASDAQ: SMCI) to $25 from $33, while maintaining a Neutral rating.
The firm maintained a positive outlook on AI server demand, forecasting strong growth through 2026 and 2027, with NVIDIA data center revenue expected to increase more than 50% year over year in 2027.
Mizuho noted that capital expenditures by major cloud service providers are projected to reach $689 billion in 2026, representing 64% growth year over year, with 2027 estimates at $811 billion, up 18%. The firm believes these figures could prove conservative given accelerating adoption of agentic AI technologies such as Claude, ChatGPT, and OpenClaw, which are driving increased computational demand.
Super Micro was described as a leader in AI server technology and well positioned to benefit from ongoing capital investment in the sector. However, near-term risks were highlighted, including geopolitical developments related to China that could shift demand toward competitors such as Dell.
The firm also pointed to Dell’s significantly larger AI services organization, which could support a pipeline of approximately $85 billion over the next five quarters.
Overall, Mizuho expects AI server spending to grow at a 44% compound annual growth rate from 2024 to 2029, reaching approximately $862 billion, with projected shipments rising to 5.67 million units by 2029, up from a prior estimate of 3.67 million units.
Despite the strong industry outlook, near-term challenges led Mizuho to lower its price target on Super Micro.
