Supermicro (NASDAQ:SMCI) stock jumped over 12.4% on Thursday, June 13. The momentum continued with a 1% rise in Friday’s pre-market session. While there was no company-specific news, investors’ optimism for artificial intelligence (AI) stocks gained momentum after semiconductor firm Broadcom (NASDAQ:AVGO) reported solid earnings, lifting SMCI stock higher.
Broadcom’s strong quarterly performance highlighted sustained high demand for AI-related products and services, indicating positive prospects for Supermicro.
Supermicro provides high-performance server and storage solutions and has been one of the key beneficiaries of the AI revolution. SMCI stock has gained over 206% year-to-date.
SMCI Targets Growth with DLC Solutions
It’s worth noting that SMCI is investing in high-quality direct liquid cooling (DLC) solutions. This initiative positions the company for accelerated growth, as AI systems require efficient heat management. Supermicro’s advancements in DLC technology and expanded production capacity for liquid cooling racks solidify its ability to meet the rising demand for these AI systems.
The company recently launched new servers with AMD’s (NASDAQ:AMD) latest EPYC 4004 processors, targeting customers seeking cost-effective and compact solutions. Further, Supermicro is developing generative AI and inference-optimized systems leveraging the latest GPUs from Nvidia (NASDAQ:NVDA) and AMD.
In summary, the company is poised to capitalize on AI demand with its strategic investments and innovations in AI infrastructure.
Analysts Weigh In
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bullish on SMCI highlight the company’s advancements in DLC technology. The analysts believe SMCI has a competitive advantage over peers with its ability to provide liquid cooling at scale.
Is SMCI a Good Stock to Buy?
Given the significant increase in SMCI stock, Wall Street analysts are cautiously optimistic about its prospects. SMCI sports a Moderate Buy consensus rating based on five Buys and four Hold recommendations.
Analysts’ average price target on SMCI stock is $1,066.25, which implies 22.4% upside potential from current levels.
