Data center specialist Super Micro Computer rounded up another bull on Thursday, as BofA Securities initiated coverage of SMCI stock with a buy rating and 1,040 price target.
On the stock market today, SMCI stock jumped 14% to close at 1,004. Year to date, SMCI stock is up 253%.
Sales have surged for the San Jose, Calif.-based company, better known as Supermicro, amid heightened demand for servers for artificial intelligence applications. It works closely with AI chipmakers AMD, Intel and Nvidia on its computer systems.
"We think this provider of server and storage solutions will be a beneficiary of AI-driven demand growth (over 50% of revenues now tied to accelerators like GPUs)," BofA analyst Ruplu Bhattacharya said in a client note. "We believe the market for AI servers is much larger than is factored in Street models."
Bhattacharya says the market for AI servers is forecast to grow at a 50% annual clip over the next three years. Supermicro is poised to take market share in the segment, he said.
SMCI Stock Goes Vertical
Since it surged out of a 22-week consolidation pattern on Jan. 19, SMCI stock has risen 18 out of 20 trading sessions.
Additionally, Supermicro ranks first out of 15 stocks in IBD's computer hardware industry group, according to IBD Stock Checkup. SMCI stock has a best possible IBD Composite Rating of 99.
IBD's Composite Rating is a blend of key fundamental and technical metrics to help investors gauge a stock's strengths. The best growth stocks have a Composite Rating of 90 or better.
Further, SMCI stock is on two IBD stock lists: Big Cap 20 and Tech Leaders.
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