Although the SMCI/Datavolt deal was first on the White House fact sheet included in yesterday GE Vernova post we didn't highlight it because of the issues surrounding the company's financial reporting.
Now it appears that Super Micro is serious about finding a more experienced CFO and should that come to pass we would take another look at what has been described as an "AI pure play" (and Nvidia's little buddy in the GPUs-as-a-Service biz). Until then, life is short enough as it is without screwing around with companies that don't get their financial filed on time.
Here's the shout-out from the White House:
- Saudi Arabian DataVolt is moving forward with plans to invest $20 billion in AI data centers and energy infrastructure in the United States.
And from wccftech, May 14:
Supermicro (SMCI) Can Feasibly Earn $4 Billion In Annual Revenue And $200 Million In Annual EBIT From Its “Party In The Desert” Deal With The Saudi Hyperscaler DataVolt
Supermicro (SMCI), a leading GPU-as-a-Service player and a prominent retailer of liquid-cooled AI racks, has managed to clinch one of the larger deals inked during President Trump's investment-focused trip to Saudi Arabia.
To wit, Supermicro has now inked a "multi-year partnership agreement" with DataVolt, a leading Saudi data center company that plans to "pair gigawatt-class renewable and net-zero green hydrogen power with the industry’s most advanced server technology."
While the granular details of this $20 billion agreement have not been made public, the deal will see Supermicro supply high-density GPU platforms and rack-scale liquid cooling systems to DataVolt over a number of years.
As per the numbers crunched by Goldman Sachs, the deal could feasibly entail $5 billion in annual revenue and an annual EBIT of around $200 million:
"Assuming a 5-year deal, 5% margins, and the entirety of the $20B represents IT hardware revenue, this would represent $4 bn of annual revenue and $200 mn of annual EBIT."
Despite the sizable windfall that Supermicro stands to gain from its just-inked agreement with DataVolt, Goldman Sachs has chosen to reiterate its 'Sell' rating for the stock, replete with a $24 share price target. For reference, SMCI shares are currently trading at the $46.86 price level in pre-market trading.
On the flip side, Raymond James analyst Simon Leopold has adopted a much more bullish view of Supermicro in light of its "Party in the desert" deal with DataVolt, reiterating an 'Outperform' rating and a $41 stock price target.
Leopold believes that the deal "expands visibility with multi-year hardware backlog and supports upward estimate revisions" for Supermicro. However, the analyst remains concerned about the "uncertain" build-out timing, currently pegged for 2028....
....MUCH MORE
Some previous mentions of SMCI:
April 2024 - "Nvidia, AI Stocks Catch A Cold After Super Micro Computer Sneezes"
November 2024 - "Stock Markets Are in Denial Over Inflation. Why Investors Face a Shock Ahead and 5 Other Things to Know Today."
Trump fills out cabinet picks, Cisco raises outlook, Super Micro stock faces delisting, and other news to start your day.January 2025 - "Short-selling firm Hindenburg Research is closing up shop"
March 2025 - "Apple Joins AI Data Center Race After Siri Mess" (AAPL; NVDA; DELL; SMCI)
There are many more, going back to 2018 but those are the most recent.
