Super Micro Computer Inc SMCI reported better-than-expected earnings for the fiscal fourth quarter (Q4) earlier this month and received a forecast raise by Susquehanna analyst Mehdi Hosseini.
A fundamental shift in the company “created the foundation” for its upbeat guidance for fiscal 2024, according to Wedbush.
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The Analyst: Matt Bryson upgraded the rating for Super Micro Computer from Underperform to Neutral, while keeping the price target unchanged at $250.
The Super Micro Computer Thesis: The company’s investments in generative AI training, “particularly as a subset of customers beyond the large CSPs (emerging cloud, enterprise, sovereign entities, etc.)” yielded results from March through June, Bryson said in the upgrade note.
“We continue to encounter evidence of additional order large flow outside of CSPs (like recent newsflow around the UK and certain Middle Eastern nations looking to source GPUs) as well as indications that availability of H100/A100s remain tight with our conversations suggesting lead times extend through at least CQ1 of next year and in some cases through 1H'24,” the analyst wrote.
“We see this setup as minimizing the likelihood of a downside event for SMCI in the next few quarters,” he added.
SMCI Price Action: Shares of Super Micro Computer had risen by 6.38% to $274.55 at the time of publication Wednesday.
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