Shares of Super Micro Computer (SMCI -5.73%) -- better known as Supermicro -- have doubled since it reported its most recent quarterly results two weeks ago. That's because sales and earnings are soaring. The provider of server infrastructure that powers artificial intelligence (AI) computing for data centers is riding the explosive growth in business uses of AI.

The stock continued its move higher Thursday after Bank of America Securities analyst Ruplu Bhattacharya initiated coverage of Supermicro with a buy rating and a price target of $1,040. For perspective, consider that Supermicro shares were trading for less than $100 per share one year ago.

Net sales and income are soaring

Supermicro reported its fiscal 2024 second-quarter results on Jan. 29 and said sales had doubled year over year. Most of the growth came in that period, which ended Dec. 31. Revenue also soared by 73% just from the prior quarter.

Bhattacharya sees the market for AI servers growing at a 50% annualized rate over the next three years. That represents most of Supermicro's revenue, and the analyst expects the supplier of server and storage solutions will be a big winner from AI-driven growth.

Is the stock moving too fast?

The sharp increase in sales and the resulting steep stock price gains are reminiscent of AI chip leader Nvidia's performance over the past year. But Supermicro also has the advantage of being able to buy chips from Nvidia's competitors as supply ramps up. Chipmakers like AMD and Intel are also suppliers to Supermicro.

So while the sharp move in Supermicro shares has driven its price-to-earnings (P/E) ratio above 40, net income growth will temper that in future quarters. Earnings nearly doubled just from its fiscal first quarter. And in conjunction with its latest earnings release, the company boosted sales guidance for its fiscal year by nearly 40%. As Nvidia, AMD, Intel, and other chipmakers ramp up production of AI chips that are in high demand, Supermicro should have a long runway to grow its business to expand data center AI server solutions.