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With a market cap of $49.8 billion, Super Micro Computer, Inc. (SMCI) is a leading developer and manufacturer of high-performance server and storage solutions based in San Jose, California. The company excels in providing energy-efficient, modular systems for diverse sectors, including data centers, cloud computing, and AI.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and Super Micro Computer fits this criterion perfectly. Super Micro Computer is distinguished by its leadership in rapidly integrating cutting-edge technology into environmentally friendly, energy-efficient IT infrastructure solutions manufactured primarily in the United States, serving a wide array of global markets.
However, Super Micro Computer has slipped 28% from its 52-week high of $1,229, achieved in March. Shares of SMCI decreased 12.3% over the past three months, which is a more pronounced dip than the broader Dow Jones Industrials Average's ($DOWI) 1.1% loss over the same time frame.
Despite recent declines, SMCI has shown impressive long-term performance, with a 211.7% surge on a YTD, easily dwarfing the DOWI's 4.5% gains. Moreover, shares of SMCI have soared 275.6% over the past 52 weeks, far outpacing the DOWI's 16.3% returns over the same time frame.
To confirm the bullish price trend, SMCI stock has been trading above its 200-day moving average since last year and remained mostly above its 50-day moving average during this period despite recent fluctuations.
SMCI has been outperforming over the past year due to its pivotal role in supplying customized AI infrastructure solutions, benefiting from strong demand and strategic partnerships with leading chip makers.
Yet, the stock plummeted nearly 14% following its Q3 earnings report on Apr. 30 due to revenue falling short of expectations despite exceeding earnings estimates. Concerns over supply chain challenges, specifically regarding components for direct liquid-cooled servers, tempered market enthusiasm despite the company's increased guidance and market share gains in AI hardware solutions.
Highlighting the stock's outperformance, its rival, Hewlett Packard Enterprise Company (HPE), is underperforming SMCI, as evidenced by a rise of 29.1% over the past year and 24.4% on a YTD basis.
Despite the stock's significant outperformance over the past year, analysts are cautiously optimistic about its prospects. The stock has a consensus “Moderate Buy” rating overall from the 13 analysts covering the stock, and the mean price target of $980.73 suggests a premium of 10.1% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
