From Nasdaq: 2024-06-06 05:12:00

Super Micro Computer (NASDAQ: SMCI) investors have seen their shares soar 176% in 2024, following a massive 246% jump in 2023. With the stock down 34% from its recent highs, some wonder if it’s the right time to buy or if the rally is over. Analysts, however, see a potential 31% upside with a $1,030 price target for Super Micro.

With an expected 31% upside potential, a consensus of 20 analysts covering Super Micro Computer have a median price target of $1,030. The street-high price target of $1,500 suggests a possible 91% increase in the stock. 70% of analysts rate the stock as a buy, given the company’s strong financial performance.

Super Micro Computer’s impressive growth includes a 95% year-over-year increase in revenue to $9.63 billion and a 90% increase in non-GAAP earnings to $15.77 per share in the first nine months of its fiscal year 2024. The company has an improving supply chain, despite strong demand for its server systems in the AI market.

JPMorgan initiated coverage on Super Micro with an overweight rating, predicting the company could control a significant share of the AI server market by fiscal 2027. Analysts foresee a 43% annual revenue growth rate, reaching nearly $30 billion by fiscal 2027. With the AI server segment expected to generate $150 billion in revenue by 2027, Super Micro could capitalize on this growing market.

Despite its recent pullback, Super Micro is valued attractively at 43 times trailing earnings and a forward earnings multiple of 21. The stock’s PEG ratio, indicating undervaluation, suggests there is still room for growth. Analysts believe Super Micro’s robust financials and growth prospects make it a compelling investment opportunity.



Read more at Nasdaq: Is It Too Late to Buy Super Micro Computer Stock?