Super Micro stock (SMCI) surged 19% to $46.19 in premarket trading after a flood of major news hit the wires. The server maker SMCI extended Tuesday’s 16% gain and sent Wall Street scrambling to keep up. The action comes as the broader S&P 500 and Nasdaq Composite only nudged up about 0.2% each.
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Raymond James Sparks SMCI Stock Rally
The rally started when Raymond James analyst Simon Leopold slapped an Outperform rating on Super Micro. The firm gave a $41 price target and called the company “a market leader in AI-optimized infrastructure” with “competitive pricing” over its rivals. Investors wasted no time grabbing shares. According to Barron’s, analysts at Raymond James said Super Micro’s “reputational risk” had weighed on the stock, but its leadership in AI servers was too strong to ignore.
Super Micro Secures $20 Billion DataVolt Deal
But the big bang came with Super Micro’s $20 billion partnership with Saudi Arabian data center giant DataVolt. The companies announced the deal Tuesday to build GPU platforms and rack systems for DataVolt’s hyperscale campuses. It is a multi-year pact designed to accelerate infrastructure delivery in the booming AI server market.
On top of that, Super Micro revealed it shipped high-density servers packed with Advanced Micro Devices’ EPYC 4005 processors. AMD stock (AMD) popped 4% on the news.
U.S. China Tariff Truce Gives Super Micro Another Lift
As if that wasn’t enough, Super Micro shares got another tailwind when the U.S. and China agreed to temporarily lower tariffs. Tthe broader market perked up and SMCI shares tagged along for the ride.
SMCI Battles Back From Steep Losses
Even with the crazy rally, SMCI is still far from its glory days. The stock is down 53% from its 52-week high and 62% off the record $118.81 price set in March 2024. Shares had peaked in February after narrowly dodging a Nasdaq delisting mess tied to delayed financial reports.
While the company says the matter is “closed,” auditor BDO issued an adverse opinion, saying Super Micro “did not maintain, in all material respects, effective internal control over financial reporting as of June 30, 2024.”
This comeback shows Wall Street still believes in Super Micro’s AI potential. Investors just hope the accounting headaches stay in the past.
Is SMCI Stock a Good Buy?
With all this action, investors are asking the big question. Is SMCI a good buy now? According to 12 Wall Street analysts tracked over the past three months, SMCI holds a Moderate Buy rating. The data, shown in the analyst ratings chart, includes six Buy ratings, five Hold ratings and just one Sell. The average 12-month SMCI price target stands at $40.83, with a high forecast of $70 and a low of $29. That represents a 5%t upside from Tuesday’s closing price of $38.89.
