The “fear of missing out” often takes over when a stock starts climbing.
Over the past five days, Super Micro Computer (SMCI) has soared nearly 40%, lifted by a wave of positive news.
The rally began Tuesday, when Raymond James initiated coverage with an outperform rating and a $41 price target.
The firm called Supermicro “a market leader in AI-optimized infrastructure,” noting that AI platforms now make up nearly 70% of the company’s revenue. Analysts also said the server maker is expanding its share of the branded AI server market and sits in a “sweet spot” between suppliers like Dell and HP Enterprise and manufacturers like Quanta. They also highlighted its “competitive pricing.”
Supermicro also announced this week that it had shipped a new batch of high-density servers powered by AMD’s EPYC 4005 processors. The company separately unveiled a $20 billion multi-year partnership with Saudi data center firm DataVolt to deliver GPU platforms and rack systems.
The stock got another lift from reports that the U.S. and China agreed to temporarily lower tariffs. Still, it remains down 62% from its all-time closing high of $118.81 set in March 2024.
Earlier this month, Supermicro posted weak fiscal Q3 results and cut its full-year forecast.
“Some customers delayed making platform decisions in the quarter,” said CEO Charles Liang. He added that tariff-related uncertainty “may have a short-term impact.”
Before running into reputational troubles last year, Supermicro was a favorite among AI investors. Its stock peaked in March 2024, driven by surging demand for servers built with Nvidia’s chips.
The company builds high-performance server hardware, supplying major cloud players like Microsoft (MSFT) and Amazon (AMZN) .
Related: Surprising guidance change sends Supermicro falling
Supermicro’s troubles escalated last August after short-seller Hindenburg Research alleged it had “glaring accounting red flags.” Soon after, the company delayed its 10-K filing for the fiscal year ended June 30.
Last October, Ernst & Young resigned as Supermicro’s auditor. Though an internal investigation found no misconduct, the company was removed from the Nasdaq 100 index later in December.
The company filed all delinquent financial statements in February and narrowly avoided a Nasdaq delisting.
Still, Raymond James analysts argued that the company’s “reputational risk” was dampening its valuation, the Barron’s reported.
Wall Street veteran Stephen “Sarge” Guilfoyle shared his views on Supermicro stock with TheStreet Pro.
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