Super Micro Computer (SMCI) stock received a new Buy rating from a five-star analyst at Rosenblatt Securities. Kevin Cassidy reinitiated coverage of SMCI stock with a price target of $60, which implies an impressive 62.6% upside potential from current levels. The analyst is encouraged by SMCI’s larger chunk of AI (artificial intelligence) revenues (70% of sales) and increased growth visibility in the near term.
Cassidy ranks 190 of the 9,417 analysts ranked on TipRanks. He boasts a notable 15% average return per rating and a success rate of 57%. Cassidy’s price target of $60 is derived based on 14x the NTM (next twelve months) non-GAAP EPS (earnings per share) multiple.
Cassidy Shares His Bullish View on SMCI
Biggest Beneficiary of AI – Cassidy shares his bullish views on Super Micro Computer, which he believes is one of the leading AI server providers for cloud, enterprise, and telecommunications markets. Indeed, SMCI is one of the biggest beneficiaries of the generative AI trend, backed by its innovation, design deployment, and manufacturing scale capabilities, Cassidy said.
SMCI’s Robust Business Model – He is also impressed by SMCI’s long history of offering “Green” computing technology, along with building block architecture (BBA), plug-and-play, Twin architecture, rack scale integration, and software platform optimization. All these factors have created a robust business model, primed for growth in the AI-driven world, he added. Importantly, SMCI has proven a solid player in delivering reliable products at scale as well as TCO (Total Cost of Ownership) optimization.
DLC Tech at Scale – Notably, Super Micro has a competitive edge in delivering liquid cooling technology at scale, a feat that many players have been unable to achieve. Direct liquid cooling (DLC) technologies are highly complex and expensive, and often have reliability concerns due to leaks or droplets but SMCI has proven its expertise in deploying them successfully at scale. SMCI’s technology when deployed at scale can boost the rack’s compute power by more than 2x, which is incredible because data centers require massive power to operate.
Is SMCI a Good Stock to Buy?
Currently, a majority of analysts prefer to remain on the sidelines on Super Micro Computer stock, despite the company becoming current with its regulatory filings and overcoming the delisting fears.
On TipRanks, SMCI stock has a Hold consensus rating based on four Buys, four Holds, and two Sell ratings. Also, the average Super Micro Computer price target of $50.50 implies 36.9% upside potential from current levels. In the past year, SMCI stock has lost 65.8%.
