Shares of Super Micro Computer (NASDAQ: SMCI) are making big gains in Wednesday’s trading session. The red-hot server company’s share price was up 6.6% as of 12:30 p.m. ET today, according to data from S&P Global Market Intelligence.
Yesterday, Barclays published a bullish note on the stock. The firm’s analysts retained an overweight rating on the company and raised their one-year price target to $961 per share.
The analysts previously had a one-year target of $691 on the stock, which Super Micro has already surpassed. Besides the Barclays note, the company’s valuation could also be getting a boost from bullish coverage on Nvidia.
Some analysts believe the rally has room to run
Super Micro Computer has seen demand for its high-performance rack servers rise dramatically in conjunction with the rise of new artificial intelligence (AI) applications. In turn, this has powered explosive gains for its stock.
The company’s share price has already risen roughly 828% over the last year, and Barclays’ new price target suggests additional upside of 14% over the next 12 months. The firm’s analysts cited favorable demand catalysts in Asia and an expanding order backlog as reasons for increasing their valuation target.
Good news for Nvidia bodes well for Supermicro
Supermicro stock could also be seeing added bullish momentum today thanks to recently published bullish coverage on Nvidia — arguably the biggest and most important name in the artificial intelligence revolution.
Susquehanna analyst Christopher Rolland published a note on Nvidia this morning and stated that he expects the leader in graphics processing units (GPUs) to post very strong fourth-quarter results thanks to AI-driven demand in the data-center segment.
Rolland raised his one-year price target on Nvidia to $850 per share, from a previous target of $625. If demand for Nvidia’s hardware is even higher than many expect thanks to AI, that suggests that demand for Super Micro Computer’s high-end rack servers could also be better than currently thought.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool recommends Super Micro Computer. The Motley Fool has a disclosure policy.
Why Super Micro Computer Stock Is Surging Again Today was originally published by The Motley Fool
Source: finance.yahoo.com