A new research note from Loop Capital suggests there may be more room for Super Micro Computer (NASDAQ:) stock’s impressive rally. Loop Capital has assigned a significantly higher price target to SMCI stock, indicating a 70% upside potential. This comes on the heels of a strong year for his SMCI, which established itself as a leader in the rapidly growing AI server market.
The stock is up more than 215% this year and 715% over the past 12 months as demand for high-performance computing power for AI applications soars. Super Micro Computer is a leading manufacturer of servers designed specifically for AI workloads. This strong demand from data centers and institutions is fueling investor optimism in SMCI.
Barclays analysts expressed their bullish stance on SMCI stock in a note to clients on Monday as they previewed its upcoming earnings. They expect strong performance from the company, adding that the company’s guidance should “easily beat the Street.”
Barclays said: “While it is difficult to assess the probability of a positive Pre-A next week, 6-Q guidance should be very strong, led by Tesla (NASDAQ:) (Musk) and Tier 2 Cloud. “I think so,” he said.
SMCI’s March quarter sales are said to be at the high end of its guidance.
Elsewhere, JPMorgan launched SMCI at Overweight in a memo last month, saying the compute cycle is at the forefront of the AI revolution.
JP Morgan analysts said: “Supermicro is a key player in the rapidly growing AI computing market driven by demand stemming from AI model training, search extension generation by Tier 2 CSPs and enterprises, and ultimately AI inference workloads. “We are a leading company.”
SMCI’s leadership is expected to continue with its balance of custom-built solutions and faster time-to-market. Still, the investment bank notes that potential upside is more likely to come from the rapid expansion of the AI server market than from an expansion in already premium valuation multiples.
Loop Capital raises SMCI stock price target
Recent analyst bullishness is echoed by Loop Capital, which raised its price target on SMCI to $1,500 and maintained a “buy” rating on the stock in a note on Tuesday. The company continues to grow in confidence both in its bullish generative AI server industry stance and in his SMCI as an increasingly leader in both complexity and scale needs.
“We believe valuation (P/E) will continue to be a point of discussion, and we believe that a P/E ratio of 20 to 30 times is sustainable if our fundamental theory holds up,” Loop Capital said. said.
Their analysis suggests that SMCI’s business remains very healthy, and like Barclays analysts, they expect strong March quarter results and strong June earnings guidance. Additionally, Loop Capital feels the company’s long-term earnings potential continues to be undervalued.
More specifically, now that SMCI has joined the He stated that he is expressing the view that it is reasonable.
