Super Micro's Liquid Cooling Tech Could Double Rack Computing Power, Analyst Predicts 60% Stock Surge

Super Micro Computer (NASDAQ: SMCI), a leading provider of server hardware and AI-centric racks, continues to demonstrate its dominance in liquid-cooling technologies—a critical component for high-density server configurations. A new analyst assessment highlights just how essential this technology is to efficient data center operations, underpinning a robust growth forecast for the company's stock.

Rosenblatt analyst Kevin Cassidy has resumed coverage of Super Micro Computer with a "Buy" rating and a bullish 12-month price target of $60 per share, predicting an approximate 60% upside from current trading levels, as detailed in a recent report via StreetInsider.

Cassidy emphasizes that Super Micro has strategically aligned itself with the burgeoning generative AI market, estimating that approximately 70% of SMCI’s revenues now stem directly from AI-focused deployments, making the company a prominent proxy for the ongoing AI investment boom.

Highlighting Super Micro’s competitive advantages, Cassidy specifically underscores its liquid-cooling technology, a feature increasingly vital amid rising data center power constraints. According to Cassidy, Super Micro’s liquid cooling can more than double rack computing power:

"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."

He further explains that the adoption of liquid cooling technologies presents unique challenges, such as complexity, increased expenses, and reliability concerns (like leaks or condensation). Super Micro’s demonstrated expertise in managing these challenges effectively positions it well above competitors.

Additionally, Cassidy lauds Super Micro’s long-standing innovations, such as Green computing initiatives, its unique Building Block Architecture (BBA), Twin architecture, and streamlined rack-scale integration—capabilities perfectly tailored to meet the demands of AI-driven data centers prioritizing rapid deployment, total cost optimization, and system reliability.

Despite recent short-term headwinds—triggered by disappointing fiscal Q3'25 guidance of between $5 billion and $6 billion (reflecting a QoQ decline of approximately 6% at the lower end and a 12% increase at the higher end)—the company significantly elevated expectations for FY 2026. Super Micro now forecasts annual revenue of $40 billion for FY 2026, far surpassing Wall Street's previous consensus of just $29 billion, according to recent reports from TipRanks.

Investors should note Super Micro’s close business relationships with tech giants like NVIDIA and CoreWeave, its largest customers, as well as its ongoing competition with Dell.

How do you see liquid cooling shaping the future of data center technology? Let us know your thoughts!