Shares of Super Micro Computer (SMCI -5.04%) jumped today, continuing a rally sparked by last Monday's strong earnings report, even though there was no company-specific news out on the company stock today. Instead, what seemed to drive the stock higher was a bullish note from Goldman Sachs on Nvidia (NVDA -0.29%) and the broader AI hardware industry.
Nvidia and Supermicro have both been big winners in the AI boom so far. Each one is seeing soaring demand for their products, which are well-designed to meet the kind of intense computing needs that large language models like ChatGPT require.
As a result, Supermicro stock finished the session up 14.4%, while Nvidia stock finished up 4.8% on the news.
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Wall Street gets more bullish on Nvidia and Supermicro
In an analyst note this morning, Goldman Sachs raised its price target on Nvidia from $625 to $800 and kept a conviction buy rating on the AI chipmaker.
The analyst sees positive data points on infrastructure spending, as well as "robust" AI server demand and an improvement in GPU supply.
Those comments were bullish for Supermicro as the company specializes in servers and storage equipment that can handle intense workloads such as those required to run generative AI programs.
Supermicro has also been supply constrained with regard to GPUs, but the company said supply was improving as the comments above seem to confirm. Improving GPU supply could allow the company's guidance to improve and for it to beat its guidance for the rest of the year.
What's next for Super Micro Computer
Shares of Supermicro have been on an incredible run over the last year as it's emerged as a winner in the generative AI revolution. This year alone, the stock is now up 134%.
While the stock may seem to be due for a breather, it could easily move as revenue doubled in its most recent quarter, and the company is likely to beat its guidance if the GPU supply constraints significantly improve.
Keep an eye on Nvidia's earnings report on Feb. 21 as better-than-expected results from the AI chip leader are likely to boost Supermicro stock as well.
