Artificial Intelligence (AI) Boost: Super Micro Computer Inc (SMCI) has been among the main beneficiaries of the artificial intelligence (AI) market explosion.
The company, headquartered in San Jose, California, is primed to experience robust revenue growth over the next several years, propelled by the surging demand for AI-related products, as per BofA Securities.
Analyst’s Optimism: Ruplu Bhattacharya, an analyst at BofA Securities, commenced coverage of Super Micro Computer with a Buy rating and a price target of $1,040.
Positive Forecast: The company is augmenting its backlog and expanding its capacity to facilitate substantial revenue growth, Bhattacharya highlighted in the inaugural assessment.
Over 50% of Super Micro Computer’s revenues are now closely linked to accelerators like GPUs, Bhattacharya noted in the report.
Bhattacharya contended that the market for AI servers significantly exceeds the current estimates and could grow at a 50% compound annual growth rate (CAGR) over the next three years. This is in contrast to the historical 5.5% CAGR of the overall server market over the past 17 years. Furthermore, he projected that Super Micro Computer’s revenues could surge even more rapidly, driving market share gains.
SMCI Price Action: Shares of Super Micro Computer had surged by 9.27% to $962.17 at the time of publication on Thursday.