Super Micro Computer stock is soaring today thanks to positive coverage from an analyst.
GF Securities raised its rating on Supermicro from hold to buy and set a one-year price target of $48 per share on the stock.
Super Micro Computer (NASDAQ: SMCI) stock is surging today thanks to bullish analyst coverage. The company's share price had risen 15.3% as of 1:10 p.m. ET amid the backdrop of a 0.4% decline for the S&P 500 and a 1.2% drop for the Nasdaq Composite.
GF Securities published a new note on Supermicro before the market opened this morning, raising its rating on the stock from hold to buy. With today's big pop, the stock is now up roughly 21% across this year's trading.
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With the note it published this morning, GF Securities set a one-year price target of $48 per share on Supermicro stock. Even with today's big gains, the new price target suggests additional upside of 35%.
While Supermicro's recent announcement of a move to sell shares in order to raise $7 billion caused the stock to see a significant pullback, GF's analysts said that the stock currently offered an attractive entry point. The firm sees Supermicro benefiting from Space Exploration Technologies ramping up its spending in the artificial intelligence space.
Supermicro has a strong position in the high-performance AI server space and stands to benefit as demand in the category continues to ramp up. On the other hand, the stock has seen bumpy trading over the last year in conjunction with news that people connected to the company had facilitated the illegal export of banned AI hardware to the Chinese market. Supermicro stock looks cheap relative to its growth potential, but the stock also comes with risks connected to its management team and legal issues.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.