What happens to Super Micro computer stock on Thursday?

Artificial intelligence server company Super Micro Computer, Inc (NASDAQ:SMCI) shares are trading lower on Thursday, in sympathy with broader semiconductor sales led by its customers, including Nvidia Corp (NASDAQ:NVDA) and Advanced Micro Devices, Inc (NASDAQ:AMD).

Despite the sale, analysts continue to hail Nvidia as the critical AI play, implying continued potential for AI frenzy. The selloff made the semiconductor company’s valuation more attractive.

Super Micro Computer stock is up 136% over the past 12 months and currently trades at a price-to-earnings multiple of 13.73x. Nvidia, up 176%, currently trades at a multiple of 33.16 PE.

Recently, Taiwanese rail kit supplier Nan Juen International Coa Super Micro Computer partner, has entered into an agreement with Nvidia to step up production of GB200 AI server kits.

The market value of AI servers has the potential to exceed $187 billion in 2024, implying a growth rate of 69% driven by demand for advanced AI servers from CSPs and major brand customers, according to TrendForce.

Market potential for AI servers supported by demand from Big Tech giants including Nvidia, AMD, Amazon.Com Inc (NASDAQ:AMZN), Amazon Web Services and Meta Platforms Inc (NASDAQ:META) explains Super Micro Computer’s stock price trajectory.

Super Micro Computer reported top-line growth of 144% in the fourth quarter. Analysts expected the AI ​​server company’s margin weakness to recover by fiscal 2025, easing the competitive pricing environment.

Investors can gain exposure to Super Micro Computer through Invesco QQQ Trust Series 1 (NASDAQ:QQQ) and S&P 500 SPDR (NYSE:SPY).

Price action: Shares of SMCI were trading down 2.77% at $606.50 as of last check on Thursday.

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This article What’s happening with Super Micro computer stock on Thursday? originally appeared on Benzinga.com

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