What Happened?
Shares of server solutions provider Super Micro (NASDAQ: SMCI) jumped 3.4% in the morning session after Barclays raised its price target on the stock. The investment bank lifted its price target to $45.00 from $29.00, a significant increase of over 55%. Despite the substantial jump in the price objective, Barclays maintained its 'Equal-Weight' rating on the technology company's shares. This analyst action followed the company's disappointing fiscal fourth-quarter results from earlier in the week, where both revenue and earnings fell short of estimates.
After the initial pop the shares cooled down to $47.01, down 1.9% from previous close.
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What Is The Market Telling Us
Super Micro’s shares are extremely volatile and have had 86 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 1 day ago when the stock dropped 21.4% on the news that the company reported weaker-than-expected fourth-quarter results and provided a disappointing financial outlook. The AI server maker posted fourth-quarter revenue of $5.76 billion and earnings per share of 41 cents, both of which missed analyst estimates. Investors also noted a drop in the company's gross margin to 9.6%. Compounding these concerns, Super Micro provided full-year sales forecast for fiscal 2026 of at least $33 billion below previous target. The weak results and lowered guidance sparked fears that increasing competition hindered the company's ability to fully capitalize on the boom in AI-related demand.
Super Micro is up 56.4% since the beginning of the year, but at $47.01 per share, it is still trading 25.2% below its 52-week high of $62.88 from August 2024. Investors who bought $1,000 worth of Super Micro’s shares 5 years ago would now be looking at an investment worth $15,577.
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