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May 27 - Super Micro Computer (NASDAQ:SMCI) shares surged about 5% on Tuesday, ending a five-day slide. However, many traders remain cautious that the volatile stock may retreat.
The shares have climbed about 31% month-to-date, eyeing the largest monthly advance since a 45% gain in February. The rally highlights SMCI's erratic performance after broad declines in March.
Volatility accelerated in early 2024 when multibillion-dollar AI spending by Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN) and other hyperscale data-centre operators stoked optimism. That enthusiasm waned after auditor Ernst & Young resigned in October 2024, raising questions about the firm's controls.
Super Micro won a Nasdaq exemption in December, granting it until February to file delayed financials. Investors also face margin pressure, intense competition and weak guidance for the fiscal fourth quarter ending June 30. In April, SMCI was the most-shorted S&P 500 stock, with 21.3% of its tradable shares sold short.
Is SMCI Stock a Buy?
Based on the one year price targets offered by 14 analysts, the average target price for Super Micro Computer Inc is $40.85 with a high estimate of $73.00 and a low estimate of $15.00. The average target implies a downside of -3.89% from the current price of $42.51.
Based on GuruFocus estimates, the estimated GF Value for Super Micro Computer Inc in one year is $68.74, suggesting a upside of +61.72% from the current price of $42.51.
This article first appeared on GuruFocus.