Loop Capital has reiterated its Buy rating on Super Micro Computer ( SMCI , Financials ), citing the rollout of Nvidias ( NVDA , Financials ) Blackwell architecture as a contributing factor to its positive outlook.

Loop Capital upped its price target for SMCI from $35 to $40 but saw possible challenges in early 2025 owing to Tier 2 client purchase habits and delays in GB200 allocation.

Developer of storage and server solutions for high-performance data centers, Super Micro has lately experienced market volatility. From a record high of $118 in March to $18 in November, the company's shares dropped dramatically in 2024 before showing a partial recovery.

The business is also tackling accounting issues that delayed the publication of its quarterly financial report for the period ending Sept. 30, 2024.

CEO Charles Liang underlined in November Super Micro's increasing proficiency in implementing liquid-cooled artificial intelligence data centers, including a recent project with 100,000 GPUs working with Nvidia.

Key Super Micro customer CoreWeave wants to increase the quantity of data centers from 30 in 2024 to 60 in 2025. Analyst Ananda Baruah called this a major ramp-up that would stimulate demand for liquid cooling on Hopper-based systems and GB200/300.

Loop Capital is hopeful about Super Micro's long-term potential despite volatility and hurdles; it credits future expansion on developments in AI technology and alliances with top companies like Nvidia.

This article first appeared on GuruFocus .