Supermicro (NASDAQ:SMCI) introduced new servers featuring AMD’s (NASDAQ:AMD) latest EPYC 4004 processors, targeting small and mid-sized businesses. Supermicro’s focus on offering innovative solutions for various applications augurs well for future growth. SMCI stock gained over 4% in Wednesday’s after-hours trading.
These new servers are ideal for companies seeking cost-effective and compact solutions. SMCI is also focused on developing new generative AI and inference-optimized systems based on the latest Nvidia (NASDAQ:NVDA) and AMD GPUs.
It’s worth noting that Supermicro provides high-performance server and storage solutions. The company has been benefitting from the stellar demand for its artificial intelligence (AI) solutions.
New Products Support Growth
Thanks to its focus on new product launches and diversifying its product portfolio, SMCI continues to win market share. Moreover, the company has invested heavily in high-quality, optimized direct liquid cooling (DLC) solutions. As AI systems become more powerful, the need for effective heat management increases. Consequently, Supermicro’s investment in DLC technology and the expansion of its production capacity for liquid cooling racks position it well to capitalize on the growing demand for AI solutions.
According to the TipRanks Stock Analysis tool, “Bulls Say, Bears Say,” analysts bullish on SMCI believe SMCI is on track to be the first to market over 1,000 direct liquid-cooled racks of NVIDIA HGX AI supercomputers.
The company’s top line jumped about 200% in Q3 of the current fiscal year. High revenue and operating leverage led to a 308% year-over-year increase in its EPS. SMCI’s backlogs are at a record high, implying solid demand for products and suggesting that the momentum in its business will likely be sustained.
Is SMCI a Good Stock to Buy?
SMCI is well-positioned to benefit from AI-driven demand. However, its stock has gained over 439% in one year and is up about 207% year-to-date. Given this rally, Wall Street analysts are cautiously optimistic about its prospects.
SMCI stock has six Buy and four Hold recommendations for a Moderate Buy consensus rating. These analysts’ average SMCI stock price target of $1,097.78 implies 25.71% upside potential from current levels.
