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Valued at a market cap of $47.4 billion, Super Micro Computer, Inc. (SMCI) is a leading provider of energy-efficient server and storage solutions based on modular and open architecture. Headquartered in San Jose, California, the company serves enterprise data centers, cloud computing, artificial intelligence (AI), and 5G and edge computing markets globally.
Shares of the server specialist have significantly outperformed the broader market over the past 52 weeks. SMCI has gained 428.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 28.5%. Moreover, in 2024, shares of SMCI are up 211.8%, easily overshadowing SPX's 10.9% gains on a YTD basis.
Zooming in further, SMCI has also outpaced the North American Tech iShares ETF's (IGM) 51.6% gains over the past 52 weeks.
SMCI’s remarkable outperformance over the past year can be attributed to its solid fundamentals and a steady pattern of earnings growth. Plus, the company’s keen focus on leveraging the AI technology boom, coupled with its innovative offerings and its strategic partnership with chip giant Nvidia (NVDA), has further fueled the positive market toward the stock.
That said, SMCI stock initially soared on May 23 following NVDA’s strong Q1 earnings report, driven by high demand for AI accelerator chips, but later fell due to volatility and profit-taking, closing down nearly 3%.
For the current fiscal year, ending in June, analysts expect SMCI's EPS to grow by 94.4% to $21.11. The company's earnings surprise history is mixed. It exceeded the consensus forecast in three of the past four quarters while falling short on one occasion.
Among the 13 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, four “Holds,” and one “Strong Sell.”
This configuration is slightly more bullish than three months before, with five analysts suggesting a "Strong Buy."
On May 1, Bank of America Securities reduced its price target on Super Micro Computer to $1,090 while maintaining a "Buy" rating, citing the company's position as a pure-play AI server vendor and anticipating sustained positive estimate revisions in the long term. This new price target suggests a 28.6% upside potential from the current price levels.
The mean price target of $980.73 represents a premium of 15.7% to SMCI's current levels. The Street-high price target of $1,500, adjusted by Loop Capital in April, implies that the stock could rally as much as 77%.
On the date of publication, Anushka Mukherjee 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.
