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Jumping Super Micro Stock: Why JPMorgan Rates It Overweight

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Jumping Super Micro Stock: Why JPMorgan Rates It Overweight

(CTN News) – Super Micro Computer shares jumped on Monday after JPMorgan initiated coverage of the stock with an Overweight rating and $1,150 price target.

Analyst Samik Chatterjee writes that “Super Micro is the leader in the AI compute market, which is booming due to demand from training AI models.”

A discussion between Josh Lipton and Akiko Fujita can be seen in the video above.

Let’s move on to our call of the day. JP Morgan will be our first stop. I am initiating coverage of Super Micro. Today’s trade saw that stock jump on the news with an overweight rating.

That’s about a 10% increase. JP Morgan is now a new friend of Super Micro. Starts with an overweight. Stocks are already monsters.

The stock is up about 275% this year. It’s still a good investment, according to JP Morgan. However, they are looking at growing AI server markets even if they are at these levels.

That, they claim, justifies the premium price. The AI server market is expected to reach over $280 billion in 2028, up from $41 billion in 2023. In that market, Super Micro clearly has some competitive advantages.

– Yes, of course. Taking 11:50 as a price target, what is it worth?

From here, it’s a nice pop. Yes, I agree.

It’s going up from where it’s been. To your point, the stock has grown 275% year to date. Talk about the growth outlook they see. By 2027, they expect revenue to grow by 43% annually. This is about the next four years. As a result, the market share would also fit between 10% and 15%.

It’s been a while since we discussed the stock. That’s possible– yeah. It’s all there in that chart. However, NVIDIA is moving in tandem with that. In the end, it’s about AI potential, NVIDIA with its chips, and Super Micro with its data servers.

Yes, I agree. That theme is so appealing to investors. These moves by NVIDIA and Broadcom, as well as this one, do highlight some risks, by the way.

Investors need to be aware, as they say, that the industry is likely to become increasingly competitive. For initial returns, enterprises may delay investments. There aren’t a lot of AI use cases. Those aren’t their buyers’ base cases.

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