TSLA - AI Server Market Is Expanding Rapidly - Analysts Highlight Super Micro Computer's Importance In The Game | Benzinga
KeyBanc analyst Thomas Blakey initiated coverage on Super Micro Computer Inc (NASDAQ:SMCI) with a Sector Weight rating.
SMCI shares are trading relatively in line with its infrastructure peer group at 27x calendar 2024 P/E vs. peers’ 28x average. The 27x for SMCI compares to 17x for low gross margin peers, but he noted Super Micro’s faster growth warrants near-term premium.
Super Micro, a leading ODM/OEM of IT infrastructure (compute, storage, networking, liquid cooling), is well positioned to benefit from secular AI growth trends provided its ability to deliver highly customized complete IT solutions leveraging its in-house engineering design expertise based on the latest technology (i.e., GPUs) in the fastest, most efficient manner, Blakey noted.
The opportunity set may extend as AI becomes more pervasive over time, driving the theme of accelerated computing where relative bespoke GPU-based solutions and other and non-x86 (i.e., Arm Holdings Plc (NASDAQ: ARM)) solutions take share in what the CEO of Nvidia Corp (NASDAQ:NVDA) has recently described as a $1 trillion installed base opportunity currently based chiefly on x86 CPUs and ASICs.
Blakey estimates that Super Micro will reach an approximately 23% share of the AI server market in calendar 2024, with competitive moats that should sustain, if not expand, this share in coming years.
The analyst noted that checks indicate other OEMs are making inroads and again highlights this market could expand beyond current ...