Better look at Nvidia, at least in terms of stock performance. A high-flying artificial intelligence stock has surged 960% over the past year and may soon become known as the dominant, well-known and massive AI processor maker Nvidia. Super Microcomputer was highlighted by analyst Rupal Bhattacharya at Bank of America on Thursday, who initiated research coverage with a buy rating and a $1,040 price target, in a booming market for making server technology. Citing the San Jose, California-based company’s leadership position, it has a significant advantage. “We think this provider of server and storage solutions will be the beneficiary of AI-driven demand growth (>50% of revenue now tied to accelerators like GPUs),” the analyst said. . “We believe the market for AI servers is much larger than street models.” Despite recent stock performance, Nvidia, the leading provider of high-end graphics processing units (GPUs) with 80% of the global market, dwarfs Super Micro. Nvidia’s market value on Thursday was about $1.8 trillion, or about 37 times Supermicro’s $49 billion. Shares of SMCI 1Y Mountain Super Microcomputer rose 13% over the past year during Thursday’s session, hitting $1,000 per share. The call from Bank of America comes amid a period of rapid strength for the GPU server system maker. Super Micro’s has already caught the attention of the investing community, nearly doubling after reporting strong earnings in late January. Shares have already more than tripled this year after a 246% gain in 2023. Despite the stock’s rally, Bank of America argues that investors are still overlooking SuperMicro’s potential, citing its accumulated backlog and capacity expansion, and partnership with Nvidia. , Advanced Micro Devices and Intel. “We expect the AI servers market to grow at an average of 50% CAGR over the next three years, versus the historical growth of the overall server market (5.5% CAGR over the past 17 years), and we expect Supermicro’s revenue to grow even more. Grow faster driving market share growth,” Bhattacharya said, citing compound annual growth rates. According to FactSet, the SMCI YTD mountain year-to-date stock performance reflects Bank of America’s price target 18% above Wednesday’s close and is the highest on Wall Street. Super Micro is already trading well above the consensus analyst price target of $683. Bhattacharya added that SuperMicro’s ability to build “server technology from the ground up” gives it a strategic boost. “This allows him to develop customized solutions with the highest performance for clients,” Bhattacharya said. “This we believe is a key competitive advantage, as is its ability to rapidly incorporate new designs and reduce time-to-market.” — CNBC’s Michael Bloom contributed reporting.
