Source: Finance Association
① Over the past year, the stock price of ultra-microcomputers has soared 764%, and J.P. Morgan believes that the company's stock price still has more room to rise; ② the bank said that ultra-microcomputers are disrupting the traditional server market through AI server stacks; ③ J.P. Morgan expects the recent dominance of ultra-microcomputers to continue.
So far this year, there has been an artificial intelligence (AI) trend indicator$Super Micro Computer (SMCI.US)$It has soared 266%. Despite a series of sharp declines last week, according to J.P. Morgan Chase, the company's sharp rise will not slow in the short term.
In the latest report released on Monday, the bank rated ultra-microcomputer stock as “overweight,” with a target price of $1,150, which has the potential to rise 18% from last Friday's close. After Xiaomo released a bullish report, the company's stock price rose by about 7.2% on Monday, and is still up about 10% from Komo's target price.
J.P. Morgan said, “Ultrafine is a leading player in the AI computing market. The market is booming due to AI model training, increased search for second-tier cloud computing service providers and enterprises, and the ultimate demand for artificial intelligence inference workloads.”
As the AI server business boomed, the stock price of ultra-microcomputer companies soared 764% over the past year. The sharp rise in the company's stock price made the company jump from the small-cap Russell 2000 index (Russell 2000 index) to a component of the large-cap S&P 500 index, with a market capitalization of about 61 billion US dollars.
J.P. Morgan expects the recent dominance of ultra-microcomputers to continue as it disrupts the traditional server market with its AI-enabled server stack.
The bank said, “We expect the leadership of ultra-microcomputers to continue to be maintained, thanks to the balance between customized solutions and rapid time-to-market. Although the potential upside is more likely to come from the rapid expansion of the AI server market, rather than from further growth in already high valuation multiples.”
“We expect this market to grow from $41 billion in 2023 to $283 billion in 2028,” the bank added.
According to the report, the expected price-earnings ratio for ultra-microcomputers is about 34 times, far higher than the expected price-earnings ratio of the S&P 500 Index about 20 times. But the company's astonishing growth seems to justify this premium multiplier. J.P. Morgan predicts that ultra-microcomputer revenue will grow at a CAGR of 43% by 2027.
“Revenue forecasts for 2027 mean Ultramicros will occupy 10%-15% of the AI server market, which we think is conservative given its early lead. We believe investors should hold on to the AI server theme given the rapid expansion of the overall market and potential upside for profits.” The line wrote.
editor/tolk