Shares of AI hardware company Super Micro Computer (SMCI) sank at the time of writing despite launching a new 3U Edge AI server that can support up to 18 GPUs. The server is powered by Intel’s Xeon 6900 processors and is designed for handling large amounts of data, as well as running advanced AI applications, especially in locations close to where the data is generated, which reduces processing delays.
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The server is called SYS-322GB-NR and includes advanced technology like high-speed memory (6TB of RAM), multiple slots for GPUs or other high-performance cards, and fast storage options. Clearly, this is a positive development that might have some wondering why the stock fell. Well, the most likely reason for this is because it follows Monday’s news when it was revealed that Super Micro installed over 100,000 GPUs that use its liquid cooling systems in AI factories.
The previous announcement led to a 16% surge in the company’s shares, which means that investors are probably taking some profits. However, since SMCI stock is heavily shorted–short interest remains above 20% of its free float, according to market research firm Ortex–another possible scenario includes short sellers adding to their positions in anticipation of further declines. It will be interesting to see how investors will ultimately price the stock as new developments emerge.
Is SMCI Stock a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Hold consensus rating on SMCI stock based on three Buys, 10 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average SMCI price target of $64.36 per share implies 42.83% upside potential.
