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Buy Alert: This may be the best chance to get SMCI stock at a big discount

Buy Alert: This may be the best chance to get SMCI stock at a big discount

While there has hardly been a shortage of excitement in the stock market since the start of 2024, few stocks have made moves as big as Supermicro Computer (NASDAQ: SMCI). 

The company grabbed the attention of analysts, investors, and technology enthusiasts by going through a massive single-quarter rally which has seen it rise from approximately $285 to, at several points, more than $1,000 per share.

Supermicro – having ridden the artificial intelligence (AI) boom in a big way in 2024 – announced late on March 19 that it is preparing a public offering of its common stock with a price tag set at $875 per share – 3.10% below the latest closing price of $903 and 26% below the stock’s yearly and all-time high of $1,188.

It is noteworthy, however, that the value of the proposition might rapidly change given that SMCI stock fell more than $30 to under $875 at the market’s opening on Wednesday only to quickly enter a slight recovery and continue trading with significant volatility.

Goldman Sachs (NYSE: GS) will act as the sole underwriter and book-running manager of the offering worth a total of $2 billion, according to a Supermicto announcement from Tuesday, March 19.

Is Supermicro a good buy at $875?

While Supermicro’s yearly highs near $1,200 might make it appear that buying the stock at only $875 is an excellent opportunity, the most recent downtrend complicates the story.

Analyst ratings of SMCI also provide a mixed picture as, while the stock is overall rated as a “buy” by the 17 analysts featured on TradingView, the average 12-month price target is below the press time price, and below the public offering price at $861.04.

SMCI analyst rating, Source: TradingView

Despite this, Supermicro boasts only a single “strong sell” rating and no “sell” recommendations, but as many as 9 experts believe it to be a “strong buy,” and another 2 to be a “buy.” 

SMCI stock price chart

While SMCI’s current trend saw the company’s shares drop approximately 25% in 5 trading days, and open on Wednesday with significant volatility, its longer-term performance remains nothing short of impressive.

In the last 52 weeks, Supermicro stock rose 789.39% and the shares surged – despite the recent decline – 207.76% since January 1 to the press time price of $878.49.

SMCI YTD stock price. Source: Google

Finally, while Wednesday’s trading has placed the value proposition of the public offering at risk given that SMCI stock fell below the asking price multiple times in the initial hours of trading, it is noteworthy that it already defied the odds and surged above $1,000 for the second time in 2024 in early March after a severe correction.

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