Super Micro Computer (NASDAQ: SMCI) shares plunged 20% on Friday. However, market observers express optimism regarding the company’s stock momentum driven by AI, which has surged over 220% year-to-date.
The surge in Super Micro’s stock value can be attributed to the burgeoning demand for the company’s high-performance rack servers, fueled by the escalating adoption of AI applications across various industries.
The company’s gains this year have been substantial, but the past 12 months paint an even brighter picture, with the company’s value increasing by over 867%. The company’s shares reached an unprecedented intraday high of over $1,077 on Friday before experiencing a dip.
Earlier in the week, Bank of America hailed Super Micro as a “powerhouse in a fast-growing market,” initiating coverage on the stock with a Buy rating and a price target of $1,040.
They wrote,
“Analysts think this provider of server and storage solutions will be a beneficiary of AI-driven demand growth.”
Furthermore, analysts project a robust growth trajectory for the AI server market, with an anticipated average annual growth rate of 50% over the next three years. This outpaces the historical growth rate of the overall server market, which stands at 5.5% over the past 17 years. They also anticipate Super Micro’s revenue to exceed this growth rate, driving substantial market share expansion.
In a note released on Friday, Wells Fargo adopted a more neutral stance, commencing coverage of the company with an Equal Weight rating and setting a price target of $960. The firm expects AI momentum to continue but believes the current share prices have already factored in substantial upside potential.
Super Micro Computer (NASDAQ: SMCI) Stock Performance
Salman Akhtar is a finance, stocks, and technology journalist with years of experience across various news organizations. He has contributed his expertise to outlets such as 24NewsHD, TrimFeed, The Voice Pakistan, and TheTechBasic. Salman is passionate about making complex topics accessible to a broad audience. His dedication to delivering accurate and timely information has established him as a trusted voice in the industry. Read Full Bio
