JP Morgan predicts that the AI server market surge will drive up Super Micro Computer's stock price, with a target price of $1150
Super Micro Computer's stock price is expected to soar due to the surge in the artificial intelligence server market. Morgan Stanley has given the company an "overweight" rating with a target price of $1150. Analysts at Morgan Stanley believe that Super Micro Computer is in a leading position in the artificial intelligence computing market, and the demand in this market will continue to grow. It is expected that the size of the artificial intelligence server market will increase from $41 billion in 2023 to $283 billion in 2028. Super Micro Computer is expected to capture 10% to 15% market share and achieve a 43% compound annual growth rate. This expectation has fueled optimistic expectations for the company's stock price increase
According to the Zhitong Finance and Economics APP, JP Morgan initiated coverage on Super Micro Computer Inc. (SMCI.US) for the first time, giving it a "overweight" rating with a target price of $1150. Analyst Samik Chatterjee wrote in a report, "Super Micro Computer is a leading company in the artificial intelligence computing market, which is thriving due to demand from AI model training, second-tier cloud service providers, enterprise search enhancement, and ultimate AI inference workloads."
Chatterjee further pointed out, "We expect Super Micro Computer's leadership position to continue, thanks to a balance of custom solutions and rapid time-to-market. Additionally, our optimistic expectations for the company's stock price increase are more being driven by the rapid growth expectations of the AI server market size, expected to grow from $41 billion in 2023 to $283 billion in 2028... rather than further growth in already high valuation multiples."
Chatterjee stated that the AI revolution, which has attracted investors' attention over the past two years, requires intensive processing power and may continue to drive investment towards the AI server market rather than the traditional server market.
Chatterjee expects Super Micro Computer to achieve a compound annual growth rate of 43% between 2023 and 2027, allowing the company to capture a 10% to 15% share in the AI server market
