Super Micro Computer (NASDAQ: SMCI) stock price is back. After pulling back recently, the stock surged by more than 11% in the pre-market session and is nearing its all-time high of $1,078.
This makes it one of the best-performing stocks in Wall Street now that it has jumped by over 270% from its lowest point this year and by 825% in the past 12 months. It has moved from a small company to one valued at over $50 billion.
Super Micro Computer is not the only major company that is soaring. Nvidia, another popular stock, surged by more than 1% in the pre-market, extending its market cap to over $2.1 trillion.
SMCI stock price surged because of three main reasons. First, like other semiconductor companies, it is having remarkable strength as investments in artificial intelligence jump.
This trend was seen in the company’s earnings that came out in January. These results revealed that its revenue jumped by 103% in the fourth quarter to $3.6 billion. This revenue was so strong that it surpassed its annual figure in 2021.
Therefore, analysts and investors believe that the company will continue doing well as IT spending rises around the world. Analysts expect that its revenue will jump to over $14.4 billion this year followed by $19.9 billion in 2025,
If analysts are correct, it means that Super Micro Computer is not as overvalued as most investors are worrying. Besides, it is trading at 2.2x estimated 2025 sales. And the company’s revenue figures may come in hotter than estimated.
Second, SMCI stock price is taking part in the overall stock market surge as animal spirits return in the stock and crypto markets. The main stock market indices like Nasdaq 100 and S&P 500 indices have jumped to a record high. In most cases, high-growth companies like SMCI thrive in such market conditions.
Third, Super Micro Computer stock has jumped because of the recent Nvidia earnings. These results revealed that its revenues surged by over 200% in the fourth quarter, signalling that there is still high demand.
SMCI and Nvidia provide semiconductor solutions to data centers and other industries. Consider the statement from its CEO below in its recent earnings call:
“We are adding further optimized new architectures for the upcoming NVIDIA GPU product lines. Our AMD MI300X systems are sampling now, and our Intel Gaudi 3 system is coming soon. We are continuing to invest and innovate in data center and enterprise liquid-cooling technology.”
Further, the company will soon enter the S&P 500 index, a move that will force all ETFs that track the index to buy the stock.
SMCI stock price forecast
I was among the first analyst to express optimism in Super Micro Computer before the current surge as you can see here. Turning to the daily chart, we see that the stock has surged above the important resistance point at $1,000 and is nearing its record high of $1,078.
SMCI has remained above all moving averages, signalling that bulls are still in control. Therefore, it seems like it has more bullish momentum to continue rising. This outlook will be confirmed if it rises above the key resistance at $1,078. Such a move will open the possibility of the stock soaring to $1,100.
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