Shares of Super Micro Computer Inc (SMCI) experienced a rollercoaster ride on Friday, initially reaching a record high of $1,077.87 before plummeting 20% by the session’s end. This decline, the largest one-day percentage drop since August, saw the stock close at $803.32, snapping a nine-day winning streak.
Despite the setback, trading activity surged, with approximately 33.5 million shares exchanged, marking the busiest trading day since the company’s initial public offering in 2007, according to data from LSEG. In contrast, the Philadelphia semiconductor index fell by 0.7%, trimming its year-to-date gains to about 8%.
Despite Friday’s decline, SMCI remained significantly above its 2023 closing price, boasting a remarkable 182% increase. Analysts offered varying perspectives on the stock’s trajectory.
Wells Fargo’s Aaron Rakers initiated coverage with an ‘equal weight’ rating and a price target of $960, noting that investors may have already factored in considerable upside potential.
Rakers highlighted SMCI’s robust momentum in the artificial intelligence (AI) sector, driven by its engineering-first approach. However, the median price target, according to LSEG data, stands at $635.29, over 20% below Friday’s close, albeit higher than the $390 median target reported on January 16.
On Thursday, SMCI surged 14% following a buy rating from BofA Global Research, which set a price target of $1,040, the highest among the 13 Wall Street analysts covering the company.
BofA lauded SMCI’s position as an early partner with leading AI chip makers like Nvidia, Advanced Micro Devices, and Intel for CPUs and GPU accelerators.
While analysts acknowledge SMCI’s strong fundamentals, the stock’s recent volatility has triggered bearish signals from a technical standpoint. The mixed sentiments underscore the challenges of navigating the unpredictable fluctuations in the market.
