JPMorgan Chase says why artificial intelligence stocks that have risen 764% in the past year still have 18% room to rise

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  • Super Micro Computer has soared 764% in the past year, and JPMorgan sees more room to rise.

  • Super Micro Computer is disrupting the traditional server market with its artificial intelligence server stack, the bank said.

  • “We expect that our balance of customized solutions and rapid time to market will continue to maintain our leadership position,” the company said.

this Super Micro Computer stock price has surged over the past year JPMorgan says it won’t be slowing down anytime soon.

Bank initiated super microcomputer The stock was given an “overweight” rating on Monday, with a price target of $1,150, representing a potential upside of 18% from Friday’s closing price. The stock rose about 6% on Monday after JPMorgan Chase issued a bullish initiation report.

J.P. Morgan said: “Supermicro is a leader in the AI ​​computing market, which is growing with demand for AI model training, search enhancement generation for secondary CSPs and enterprises, and ultimately AI inference workloads. .”

Super Micro Computer Co., Ltd. The company has soared 764% in the past year as its AI server business booms. The sharp jump in the company’s stock price lifted the San Jose-based company from small-cap to large-cap on the Russell 2000 Index S&P 500 Index Index, giving it a market capitalization of approximately $60 billion.

JPMorgan expects AMD’s recent dominance to continue as it disrupts the traditional server market with its AI-powered server stacks.

JPMorgan Chase said: “We expect leadership to continue due to the balance between customized solutions and rapid time to market, although potential upside is more likely to come from the rapid expansion of the AI ​​server market rather than Expansion of already premium valuation multiples.” said.

The artificial intelligence company’s forward price-to-earnings ratio is about 34 times, well ahead of the S&P 500’s forward price-to-earnings ratio of about 20 times. But Super Micro seems to justify this premium valuation multiple. The computer field is growing at an alarming rate, with JPMorgan predicting that revenue will grow at a compound annual growth rate of 43% in 2027.

JP Morgan said: “The 2027 revenue forecast implies that AMD will capture 10%-15% of the AI ​​server market, which we believe is conservative given its early lead.” “We believe this forecast is conservative.” Investors should own AI servers considering the overall market’s rapid expansion and potential upside in profitability.”

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