SMCI stock could be a bubble, but this bubble has legs – analyst (exclusive)
Investing.com — The surge in the Super Micro Computer's (NASDAQ:SMCI) stock price has gathered significant momentum, thanks in no small part to the growing influence of artificial intelligence. The question now is whether that momentum can continue in the foreseeable future.
SMCI stock price
Super Micro Computer stock tumbled 20% Friday, but that only tells a fraction of the company's story over the last 12 months, with an enormous 744% gain registered, even after Friday's decline.
The SMCI share price has benefitted from an ongoing rise in AI demand. However, some analysts have questioned whether the stock is in a bubble.
Based on Friday’s close, the SMCI stock is up 176% year-to-date.
What does Super Micro Computer do?
SMCI is an information technology company that designs, develops, manufactures, and markets server, storage, networking, and computing systems. The company is known for its energy-efficient and high-density servers, and it offers a wide range of products and services for a variety of applications.
The company is heavily involved in the AI industry, playing a pivotal role in providing the hardware and software infrastructure that powers AI development and deployment. SMCI's stock price increase has been fueled by surging demand for the company's high-performance rack servers for AI applications.
SMCI stock forecast
Rosenblatt analyst Hans Mosesmann raised his price target for SMCI to $1,300 from $700 this week, maintaining a Buy rating on the stock. The analyst cited the continued momentum in AI computing that they observed during recent visits to Silicon Valley and the UK.
«Key to the story is for investors to consider that the company is benefiting not only from secular AI growth (over 50% CAGR over
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