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Super Micro Computer shares fall, but analysts expect the AI momentum to continue

AuthorSam Boughedda
Published 02/16/2024, 12:16 PM
Updated 02/16/2024, 12:19 PM
Super Micro Computer (SMCI) shares fall, but analysts expect the AI momentum to continue

Super Micro Computer (NASDAQ:SMCI) shares tumbled more than 13% Friday, but the AI momentum for the stock, which has risen more than 220% so far this year, is expected to continue.

The incredible run higher has been fueled by surging demand for the server company's high-performance rack servers as a result of the rise in new artificial intelligence (AI) applications.

The year-to-date gains have been monumental, but over the last 12 months, it is even better reading for the company, up over 867%. It hit an all-time intraday high of over $1,077 per share on Friday before its fall.

Earlier this week, Bank of America labeled the company a "powerhouse in a fast-growing market," initiating the stock with a Buy rating and a price target of $1,040.

"Analysts think this provider of server and storage solutions will be a beneficiary of AI-driven demand growth," they wrote.

"Analysts believe the market for AI servers is much larger than is factored in Street models. Analysts expect the market for AI servers to grow, on average, 50% CAGR over the next three years, vs. historical growth of the overall server market (5.5% CAGR over the past 17 years), and they expect Super Micro's revenue to grow even faster-driving market share gain," they added.

Meanwhile, in a note today, Wells Fargo was more neutral, initiating the company with an Equal Weight rating and a $960 price target. The firm said they expect the AI momentum to continue but believe the shares are already discounting solid upside.

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Latest comments

$1200 this week, buy the dip now
2/16, was nothing more than Profit selling. Buy the dip, $1200 coming this week, anyone who is advocating this stock to drop, probably because they have "Puts" on the stock, pay them no mind. SMCI is a solid company, with Solid Earnings, and a fantastic Valuation.
Strong Company, Strong Valuation, 2/16, was taking profits, reason for stock drop. Buy the dip, $1200 SP coming this week
1600 by Nov ... buy the dip
is there any competitor of AI server like SMCI?
SMCI showed one of the most predictable reversals. It was textbook. If you are in this stock, you should be connected to your indicators every minute of the trading day. No matter if you use short or longer averages, you could see the writing on the wall and hear the knocking at the door warning you of what happened today.
I remember reading comments exactly like these when TSLA made the big run and split... There is a lot of momentum behind AI and SMCI has positioned itself to be one of the greatest beneficiaries of this technology. Keep a close reign on your stop losses and moving averages and jump in on the next rally
This article proves that someone got stuck in the junk ))
Do you really think ai search results will really supercede sponsored lin.ks or pay per cli.ck?
yes, exponentially
The concentration in so few companies is unrivalled historically and dwarfs what was seen during the 1999 craze or the nifty fifty. The reversal will be that much worse.
 The problem is that for every person aware of reality there are ten who drink the koolaid.  Yeah, Wall Street is out to make YOU and the others who lap it up rich, with no intention of getting your money out of your pocket and into theirs!  Bwa ha ha ha ha ha.
 The problem is that for every person aware of reality there are ten who drink the koolaid.  Yeah, Wall Street is out to make YOU and the others who lap it up rich, with no intention of getting your money out of your pocket and into theirs!  Bwa ha ha ha ha ha.
 you obviously have "Puts" on this stock, you want it to go down very much, thats your right, however don't ignore this solid company with a strong product and valuations....
SMCI will drop to $500 next week
I agree with a pullback. Nobody knows how much it will correct before it goes much much higher.
or $1200 this week The Company Valuation is pointing that way, just sayin, I wouldn't bet against it
AI bubble bloodbath will be epic
Or Champagne Bath, $1200 this week SP, Valuations are certainly pointing that way, I wouldn't bet against this company...
the bears are driven crazy by the AI hype, good to see cos the bears never learn
Just like when the bears were driven crazy in 1999-2000 by the Internet hype. Tech can never let you down. LOL
Trying to get around export bans it sure seems
Boa should be investigated for timing was perfecr to dump on a Friday when puts options are cheap ..billions were made in.puts.racketeering!
This is ridiculous. Its gonna crash like a m.f soon.
information
Lol Nvidia is buying their own chips. And people are catching onto it. And any company that goes from 300 to 1100 in 1 month is not a quality company. Slow and steady growth is a quality company. You analyst love bagging people. I hope the lies and fraud of Nvdia cooking its books and buying their own chips to inflat numbers catches up to them
Why do folks hate nvda so much it been a great stock and company. Its like they missed the run and need to see it drop to feel good about themselves
Look nvda could be down 20 percent next week it could also be up that much. But if u think they are somehow bumping their numbers i think maybe u are short sighted. AI is a pie that will grow in the next few years and nvda will be part of it. Just buy it and walk away come back in a year or two and i think u will be happy. But trying to trade it wont work. This is an own it dont trade it stock
Stop this AI buzz word for every IT company. It is becoming inflationary and looses its value!
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