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This year has been an exceptionally remarkable period for a broad spectrum of artificial intelligence (AI)-associated stocks. In the case of Super Micro Computer (NASDAQ:SMCI), this holds true, with the stock having already more than tripled on a year-to-date basis. The latest double-digit surge in SMCI stock has propelled the stock to within striking distance of $1,000 per share, marking a new all-time high.
The meteoric rise in the high-performance server and data center storage company appears to stem from both macroeconomic tailwinds and specific company catalysts. Notably, a new “buy” rating from BofA Securities has propelled the stock higher today, with analysts setting an ambitious $1,040 price target on SCMI stock.
Now, as Super Micro’s stock price approaches that target, investors must contemplate whether this stock can sustain this impressive rally, or if a breather is imminent. The burning question is: can SMCI stock continue its amazing run?
The Bull Run Is On for SMCI Stock
Analysts are bullish on Super Micro for several pivotal reasons. The company’s crucial role in AI-related data center storage and operations is fundamental. Its collaboration with AI chip manufacturers to create expansive computing systems ignites excitement among long-term investors, particularly as we teeter on the brink of a potential new era of AI.
While server and storage solutions may not be the glitzy side of the AI industry, they are indispensable for the sustained functionality of various top applications. For any AI application to flourish, both the computing power (the chips) and the storage location (the server farms) need to be in place and stable. Super Micro furnishes the latter to numerous companies, and its business model is intricately linked with that of various chip makers.
Super Micro’s recent financial results spotlighted impressive earnings growth, nearly 50% higher than the consensus estimate. With this, it seems that both Wall Street analysts and Main Street investors concur that Super Micro is poised to reap substantial benefits from the AI boom.
If the company can continue to deliver earnings beats of this magnitude, SMCI stock certainly has the potential for further upward momentum. Of course, it’s important to bear in mind that all good things must come to a halt at some point. However, for now, the sky seems to be the limit for SMCI stock.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
