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Super Micro Computer, Inc. (SMCI), headquartered in San Jose, California, manufactures and sells energy-efficient server solutions based on the x86 architecture. Valued at $39.2 billion by market cap, its product range includes rack-mount and blade servers as well as components, emphasizing superior design and quality. SMCI is scheduled to release its fiscal 2024 Q4 earnings results on Saturday, Aug. 13.
Ahead of the event, analysts expect Super Micro Computer to report a profit of $7.63 per share, up 122.5% from $3.43 per share in the year-ago quarter. The company has exceeded Wall Street’s EPS estimates in three of the last four quarters while missing on one occasion.
Super Micro Computer’s EPS of $6.56 for the last reported quarter grew 308% year over year amid record demand for AI rack scale DLC systems, beating the consensus estimate by 21%.
Analysts expect Super Micro Computer to report an EPS of $21.11 in fiscal 2024, up 94.4% from $10.86 in fiscal year 2023. Moreover, its fiscal 2025 EPS is projected to rise 43.6% annually to $30.32.
SMCI stock soared 175.5% on a YTD basis, considerably surpassing the broader S&P 500 Index's ($SPX) 16.5% gains and the Technology Select Sector SPDR ETF’s (XLK) 17% returns during the same period.
SMCI stock has outperformed the broader market this year due to the AI boom and escalating demand for its products. The company has become a Wall Street darling by serving as a middleman between AI chipmakers and their data center clients.
While Super Micro Computer holds a smaller share of the traditional server market, its focus on high-performance servers has made it a key partner for NVIDIA Corporation (NVDA), which gave SMCI early access to its high-end data center GPUs. Moreover, SMCI continues to grow its market share and expand beyond Nvidia-powered AI servers through new deals with Advanced Micro Devices, Inc. (AMD) and Intel Corporation (INTC). As a result, Loop Capital's Ananda Baruah says the stock could soar 84% to $1,500 in the next three years.
But it's not all sunshine and rainbow for the stock. Despite exceeding earnings estimates, the stock dropped nearly 14% after the release of its Q3 earnings report on Apr. 30 because its revenue fell short of expectations. Even though the company raised its guidance, market enthusiasm was dampened by concerns about supply chain issues, particularly with components for direct liquid-cooled servers.
The consensus opinion on Super Micro Computer stock is a “Moderate Buy.” Out of 13 analysts covering the stock, seven suggest a “Strong Buy,” five advise a “Hold,” and the remaining analyst recommends a “Strong Sell.”
The average price target for Super Micro Computer is $1,031.36, indicating a potential upside of 31.7% from the current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
