Super Micro Computer (SMCI 1.28%) stock's incredible rally has continued this week. The sever and storage company's share price was up 35.6% from last week's market close before the market opened this Friday, according to data from S&P Global Market Intelligence.
NASDAQ: SMCI
Key Data Points
Super Micro Computer stock got a boost from favorable coverage from multiple analysts, and it also got a boost from bullish coverage on Nvidia. Supermicro's share price is now up roughly 253% across 2024's trading and 980% over the last year.
Wall Street has become increasingly bullish on Supermicro
On Feb. 13, Barclays analysts released a bullish note on Supermicro. Citing strong demand indicators in the Asian market and an expanding order backlog for the business, the firm's analysts raised their one-year price target on the stock from $691 per share to $961 per share.
Notably, the stock blew past that target just days later and is now trading above $1,000 per share. Another analyst was even more bullish.
On Feb. 15, Bank of America's Ruplu Bhattacharya initiated coverage on the stock with a buy rating, saying Wall Street is currently underestimating the market for AI-focused servers. Bhattacharya set a price target of $1,040 per share on the stock. At the time of the note's publication, that suggested potential upside of 18% -- but the note triggered big gains for Supermicro's share price. The stock would now need to climb less than 4% to hit the analyst's recent target.
Supermicro stock likely also got some extra momentum from a bullish note on Nvidia that was published by Susquehanna analyst Christopher Rolland on Feb. 14. Rolland stated that he believed that artificial intelligence (AI) would push sales for Nvidia's data center segment above already sky-high expectations in Q4. The graphics processing unit (GPU) leader is a bellwether for overall demand in the AI space, and Supermicro is also one of its customers.
What comes next for Supermicro?
Supermicro has seen orders for its high-performance rack servers surge as companies, institutions, and government agencies have made moves to take advantage of new AI technologies. The company provides advanced, customizable servers, and its tech helps enterprise customers store and process the huge amounts of data needed to train and run AI software.
For its 2024 fiscal year, which concludes June 30, Supermicro is guiding for sales to come in between $14.3 billion and $14.7 billion. That guidance range suggests that sales will more than double from the $7.12 billion it recorded in its last fiscal year. Given recent demand trends, I think there's a good chance that the business will significantly exceed the high end of its guidance range.
