Super Micro Computer Inc SMCI stands as a leading beneficiary of the artificial intelligence (AI) market explosion.

The company, headquartered in San Jose, California, is anticipated to witness robust revenue growth in the coming years, propelled by AI-related demand, as per BofA Securities.

The Analysis by BofA Securities: Analyst Ruplu Bhattacharya of BofA Securities has initiated coverage of Super Micro Computer with a Buy rating and a price target of $1,040.

The Super Micro Computer Perspective: The company is actively broadening its backlog and expanding its capacity to bolster substantial revenue growth, as outlined by Bhattacharya in their initiation note.

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More than 50% of Super Micro Computer’s revenues are now linked to accelerators like GPUs, noted the analyst.

Bhattacharya emphasized that the market for AI servers is “significantly larger” than what is currently reflected in Street models. He projected that it could witness a 50% compound annual growth rate (CAGR) over the next three years, in contrast to the historical 5.5% of the overall server market over the past 17 years. Additionally, the analyst suggested that Super Micro Computer’s revenues could experience even faster growth driving market share gain.

SMCI Price Movement: At the time of publication on Thursday, shares of Super Micro Computer had surged by 9.27% to $962.17.

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