Super Micro Computer (SMCI, Financial) shares surged 4% higher on Tuesday morning after Raymond James began coverage of the AI-focused server company with an "Outperform" rating and a price target of $41.
The brokerage said Super Micro has positioned itself as a leading supplier of infrastructure tailored for artificial intelligence workloads. Analyst Simon Leopold noted that around 70% of the company's revenue now comes from AI platforms, with gains in market share among branded server makers.
Raymond James highlighted Super Micro's ability to combine large-scale manufacturing with flexible, engineering-led solutions. The company sits between traditional IT providers like Dell Technologies (DELL, Financial) and HP Enterprise (HPE, Financial), and contract manufacturers such as Quanta.
While Super Micro may not offer the consulting or financing options of larger firms, its ability to deliver customized, high-performance hardware has helped it capture 9% of the total AI platform market and about 31% among branded players.
The analyst cited increasing demand for hyperscale AI infrastructure and the rollout of NVIDIA's (NVDA, Financial) Blackwell chips as key growth drivers. Despite volatility tied to product shifts and limited enterprise services, Raymond James expects the company's expanding U.S. operations and 25%+ revenue CAGR to support further valuation upside.
