One of the most popular artificial intelligence (AI) stocks in 2024 has been Super Micro Computer, which is traded on the NASDAQ ticker symbol SMCI. During the first year of the year, the share price of the server specialist has increased by 260%, and some analysts on Wall Street believe that the rising demand for artificial intelligence solutions will continue to drive the stock higher.
An overweight (buy) recommendation was assigned to Super Micro by JPMorgan analyst Samik Chatterjee on March 25. This marked the beginning of coverage for the company. A one-year price objective of $1,150 per share was set by Chatterjee for the stock. This represents a 12% increase over the stock's closing price on March 26 for the same time period.
It is possible that Super Micro's dominance in artificial intelligence servers might generate major growth.
According to Chatterjee, Super Micro is the most successful company in the artificial intelligence server industry, which is a category that is playing an increasingly essential role in advancing the process of the AI revolution.
Customers that are interested in rapidly launching data-processing capabilities for artificial intelligence can purchase high-performance rack servers from the company. These servers make use of graphics processing units (GPUs) manufactured by Nvidia as well as other processors to provide a full solution.
The extraordinary growth in revenue and earnings that Supermicro has seen can be attributed to the need for computational resources that is associated with the training of massive language models and other uses of artificial intelligence.
The revenue of the corporation increased by 103% year over year to $3.66 billion during the second quarter of the fiscal year 2024, which ended on December 31. In the period, earnings that were adjusted for non-GAAP factors increased by 72%, reaching $5.59 per share.
In the end, Chatterjee anticipates that Super Micro will continue to maintain its leadership position in its segment of the server industry with a share of between 10 and 15 percent. Two of the most important competitive advantages that the company possesses are its custom-built server solutions and its rapid time to market
f his prediction turns out to be accurate, the company should continue to see an increase in demand as more and more businesses establish and scale data centers that are designed for the purpose of running and distributing apps that utilize artificial intelligence.
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