2 Stock-Split AI Stocks to Buy Before They Soar 85% and 105%, According to Certain Wall Street Analysts

Super Micro Computer (NASDAQ: SMCI) completed a 10-for-1 stock split in October 2024, and Arista Networks (NYSE: ANET) completed a 4-for-1 stock split in December 2024. Interestingly, neither stock has beaten the S&P 500 (SNPINDEX: ^GSPC) since the splits were announced, which is somewhat atypical.

Since 1980, stocks that split have outperformed the benchmark index by an average of 13 percentage points during the year following the announcement. However, certain Wall Street analysts anticipate big gains for Supermicro and Arista shareholders during the next 12 months, as detailed below:

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• Ananda Baruah at Loop Capital recently raised the target price on Supermicro to $70 per share, which implies 105% upside from the current share price of $34.
• Ryan Koontz at Needham recently reiterated his target price on Arista at $145 per share, implying 85% upside from the current share price of $78.

Here's what investors should know about these artificial intelligence stocks.

Super Micro Computer: 105% upside implied by Loop Capital's target price

Super Micro Computer builds data center servers, including liquid-cooled server racks optimized for artificial intelligence (AI). Internal manufacturing capabilities and a modular approach to product development have helped the company secure a leadership position in AI servers, a market forecast to grow at 30% annually through 2033, according to Statista.

Last year, Hans Mosesmann at Rosenblatt wrote, "Super Micro has developed a model that is very, very quick to market." Due to its use of common electronic building blocks across different product lines, which can rapidly be assembled into servers with various specifications, the company also usually has the widest portfolio of products when Nvidia, AMD, or Intel releases a new chip.

However, other analysts argue that there is nothing unique or innovative about Supermicro. The company simply builds servers with chips and hardware purchased from other suppliers. "Super Micro doesn't really do the innovation. They are a contract manufacturer with willingness to commit working capital. Most of the innovation is done upstream," says Mehdi Hosseini at Susquehanna.

Supermicro recently regained compliance with Nasdaq filing requirements. Last year, a short seller accused the company of accounting manipulation, setting in motion a series of events that delayed its Form 10-K for fiscal 2024 and Forms 10-Q for the first and second quarters of fiscal 2025. However, the audit discovered no evidence of fraud or misconduct, and the company submitted the forms before the deadline in February.

The company reported mixed results for the second quarter of fiscal 2025, which ended in December. Revenue rose 55% to $5.6 billion, but gross profit margin contracted 350 basis points to 11.8%, which suggests Supermicro is losing pricing power as competition intensifies in the AI server market. Consequently, GAAP (generally accepted accounting principles) net income was flat at $0.51 per diluted share despite strong growth on the top line.

Wall Street expects the company's earnings to grow at 20% annually through fiscal 2026, which ends in June 2026. That makes the current valuation of 13 times earnings look cheap. While the argument that Supermicro lacks unique qualities has merit, I also think the stock is undervalued today. Not so much that triple-digit returns are likely in the next year, but enough for patient investors to consider a small position today.

Arista Networks: 85% upside implied by Needham's target price

Arista develops networking solutions for cloud and enterprise data centers. Unlike legacy vendors, its switches and routers run a single operating system, which lets clients deploy a seamless network across public, private, and hybrid clouds. It also reduces the cost of network ownership. That advantage has helped Arista secure a leadership position in the high-speed data center switching market.

Importantly, Arista has a particularly strong presence in the fastest switching categories (i.e., 100 gigabit to 400 gigabit), with more than 3 times the market share of its closest competitor, Cisco Systems. That leaves Arista ideally positioned to benefit as AI drives demand for increasingly fast data center networks.

Arista reported fourth-quarter financial results that beat estimates on the top and bottom lines. Revenue rose 25% to $1.9 billion, the second straight acceleration, and non-GAAP net income increased 25% to $0.65 per diluted share. Meanwhile, the company provided full-year guidance that implies 17% revenue growth in 2025.

Arista serves several large technology companies, including Microsoft, Meta Platforms, Apple, and Oracle. It should benefit as those clients build out their AI infrastructures. Wall Street expects earnings to increase by 10% in 2025, making the current valuation of 34 times earnings look expensive, but I think the consensus is too pessimistic.

As mentioned, management guided for 17% revenue growth in 2025, which hints at similar earnings growth. Also, Arista beat the consensus estimate by an average of 14% in the last six quarters. If that persists, the present valuation would look reasonable in hindsight. And with Arista stock 40% off its high, now is a good time to buy a small position.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Trevor Jennewine has positions in Arista Networks and Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Arista Networks, Cisco Systems, Meta Platforms, Microsoft, Nvidia, and Oracle. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.