Super Micro Computer is a top AI stock with significant growth potential in AI server market

From Nasdaq: 2024-07-22 04:16:00

Super Micro Computer (NASDAQ: SMCI) is a top AI stock with shares up 2,290% in 3 years. Analysts are split, with price targets ranging from $325 to $1,500. Sales of AI servers are driving revenue growth, with estimates of 58% and 52% CAGRs from 2023 to 2026.

Supermicro’s growth is fueled by high-performance servers and a partnership with Nvidia. The AI server market is expanding, with estimates of a 26.5% CAGR from 2024 to 2029. Analysts see Supermicro increasing its share from 10% in 2023 to 17% in 2026.

Loop Capital believes Supermicro’s business is healthy and could benefit from the AI market expansion. However, competition from Dell and HPE and a potential slowdown in the AI market are concerns. Supermicro’s stock price could near $1,100 by fiscal 2026, but reaching $1,500 may require a higher forward earnings multiple.

Loop Capital’s $1,500 price target for Supermicro may be ambitious. The average price target is over $1,000, making it a volatile investment in a choppy market. Supermicro’s future success hinges on maintaining its competitive edge in the AI server market and expanding its market share.



Read more at Nasdaq: 1 Top Artificial Intelligence (AI) Stock to Buy Before It Soars 84%, According to Loop Capital