July 20, 2024

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Why Super Micro Computer Stock Jumped Again Today

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Super Micro Computer (NASDAQ: SMCI) stock posted big gains again in Tuesday’s trading. The server specialist’s share price closed out the daily session up 3.7%, according to data from S&P Global Market Intelligence.

While there wasn’t any business-specific news pushing the stock higher today, the tech company’s valuation advanced thanks to an analyst’s belief that artificial intelligence (AI) will continue to power strong demand for servers. In particular, Super Micro stock appears to have gained ground thanks to bullish coverage on Dell stock published by Morgan Stanley analyst Erik Woodring. Super Micro stock is now up roughly 224% across 2024’s trading.

Super Micro climbs on surging AI server demand

Citing strong demand for servers capable of powering AI services, Morgan Stanley’s Erik Woodring published a bullish research note on Dell stock yesterday. The incredible rise in demand for high-performance rack servers has helped to power incredible sales and earnings growth for both Dell and Super Micro over the last year. In turn, both companies’ share prices have skyrocketed.

Thanks in large part to the positive coverage from Morgan Stanley’s lead analyst on the stock, Dell’s share price posted 5% gains in Tuesday’s trading, and Super Micro’s share price saw gains in tandem with the advance. Even though Dell and Super Micro have a somewhat competitive dynamic in the server space, promising demand indicators are a bullish indicator for both companies.

What comes next for Super Micro stock?

It seems clear that the AI revolution is just starting to unfold. Super Micro is positioned as a leading provider of one-stop-shop, high-performance rack servers capable of powering advanced AI applications. But the rapidly evolving nature of AI means that investors have to keep developing risk factors in mind before going all in on any hot stock in the space.

While bullish coverage on Dell helped power significant gains for Super Micro stock today, investors should keep emerging…



2024-06-18 17:13:00

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