/Super%20Micro%20Computer%20Inc%20HQ%20photo-by%20Tada%20Images%20via%20Shutterstock.jpg)
San Jose, California-based Super Micro Computer, Inc. (SMCI) develops and manufactures high-performance server and storage solutions based on modular and open architecture. With a market cap of $24.9 billion, Super Micro operations span the United States, Europe, Asia, and internationally.
Companies worth $10 billion or more are generally described as "large-cap stocks," Super Micro fits right into that category, with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the computer hardware industry. Its solutions include a range of rack mount and blade server systems and components.
Super Micro has slipped 64% from its all-time high of $1,229, reached on Mar. 8. SMCI has dipped 42.9% over the past three months lagging behind the Technology Select Sector SPDR Fund’s (XLK) 2.5% decline during the same time frame.
Over the longer term, SMCI has outperformed XLK. SMCI gained 65.2% over the past 52 weeks and 55.5% in 2024, outpacing XLK’s 28.6% gains over the past year and 14% returns on a YTD basis.
To confirm the recent bullish trend, SMCI has traded below its 50-day moving average since mid-July and below its 200-day moving average since early August.
Super Micro has experienced significant volatility recently. SMCI plummeted 20.1% after the release of its Q4 earnings on Aug. 6. Despite reporting robust growth, with net sales surging 143% year-over-year to $5.3 billion and EPS increasing by 60.6% to $5.51, Super Micro fell short of Wall Street's EPS estimates by 27.1%.
The situation further deteriorated when SMCI stock declined an additional 19% on Aug. 28 after Hindenburg Research published a report accusing the company of accounting manipulation, sibling self-dealing, and sanctions evasion.
Super Micro’s competitor, Arista Networks, Inc. (ANET), has underperformed SMCI. ANET has gained 88% over the past year and 50.9% in 2024.
Among the 12 analysts covering the SMCI stock, the consensus rating is a “Moderate Buy.” The mean target price of $819.07 represents a potential upside of 85.3% from current price levels.
On the date of publication, Aditya Sarawgi 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.
