Super Micro Computer (NASDAQ: SMCI) stock has so far performed strongly in 2024, rising 149.50% and trading above the $1,000 mark during the first half of March.
However, since then, SMCI stock experienced a significant drawback of 40% from a high of $1,188 on March 13. Despite this, the latest trading session brought a gain of 2.38%, with SMCI shares closing at $712.19.
Given the volatility, investors have begun to question whether the chipmakers’ rally is over or whether the $1,000 threshold is still achievable over the next 12 months.
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Technical analysis of SMCI stock
As SMCI stock posts a slight recovery, technical analysis reveals that after falling below its previous support level of $740, the next closest support level is $671.
Conversely, a resistance zone is identified at levels of $972.
Simple moving averages for 50, 100, and 200-day periods reveal a somewhat mixed picture, as the 50—and 100-day SMAs remain above the current SMCI stock price, while the 200-day SMA is currently surpassed.
Analysts think $1,000 might be too much for SMCI stock
While SMCI stock has shown positive performance in its latest trading session, analysts on Wall Street believe that its performance will largely be dictated by the overall semiconductor and artificial intelligence (AI) sector, thus placing limitations on the Super Micro Computer.
While assigning the most recent price target, equities research analysts at Susquehanna raised Super Micro Computer’s price target from $285 to $325 in a report issued on July 15. Despite this increase, the firm maintains a “negative” rating on the stock. Susquehanna’s target price indicates a potential downside of 54.36% from the company’s current stock price.
Nomura analysts downgraded Super Micro Computer stock to “neutral” from “buy,” citing “limited share price upside.”
In a July 11 note, analysts stated, “after Super Micro’s strong guidance for CY4Q23-CY1Q24, the performance potential has shifted from ‘easy to beat low market expectations’ in CY4Q23 to ‘less room to beat already-high market expectations.'”
Nomura’s outlook is influenced by uncertainties around the easing of CoWoS-S supply in 2024 and the potential transition between Hopper and Blackwell GPUs in the latter half of the year.
On July 10, Wells Fargo maintained an equal weight rating on SMCI with a price target of $890. They highlighted that SMCI shares have shown significant volatility around past earnings releases, with the upcoming quarterly report scheduled for August 6.
Some analysts see SMCI stock reaching $1,000
Barclays analyst George Wang expects quarterly revenue to range between $5.1 billion and $5.5 billion, aligning with the company’s guidance.
While a positive surprise for the June quarter is unlikely, Wang anticipates “some upside for future quarters.”
He credits this optimism to launching new products with limited competition, such as DLC deployments with higher average selling prices per rack.
The analyst predicts a “likely better-than-expected” September quarter and substantial FY25 revenue, driven by new product launches supporting Nvidia’s (NASDAQ: NVDA) H200, B100, B200, GB200, and Advanced Micro Device’s (NASDAQ: AMD) MI300X.
Although no top-line beat is expected for June, Wang sees potential for better-than-expected gross margins. Despite Dell (NYSE: DELL), a leading rival, shipping AI servers with “low profitability,” Wang’s analysis suggests the 13.7% gross margin guidance might be “too low.”
Wang rates SMCI stock as “overweight” and sets a $1,000 price target.
However, Wang goes against the technical analysis and broader Wall Street sentiment, which is currently grading the SMCI stock as a “moderate buy” with a $978.50 price target.
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