Bank of America increases Super Micro’s price target to $1,280 from $1,040 while maintaining a Buy rating.
The analyst notes that Super Micro $SMCI is anticipated to sustain robust revenue growth due to increasing demand for servers in areas such as Artificial Intelligence (AI), High-Performance Computing (HPC), big data analytics, engineering/technical workloads, streaming and content delivery, as well as compute-intensive graphics and online gaming.
Analyst Ruplu Bhattacharya anticipates industry growth to expand from $39 billion to approximately $200 billion between 2023 and 2027.
The company highlights Supermicro’s strong points, which encompass its modular architecture facilitating swift tech integration, strategic partnerships with leading providers of AI CPUs/GPUs/ASICs, tailored configurations, and liquid cooling solutions.
Nevertheless, Bhattacharya highlights potential risks, including GPU availability challenges, competitive pricing pressures, and the risk of a re-evaluation if growth expectations are not met.
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