Super Micro Computer recently announced a 10-for-1 stock split.
Server manufacturer Super Micro Computer hit its stride last year as demand for artificial intelligence (AI) hardware built momentum. The stock has surged 550% since January 2023, and the company has been added to the S&P 500 and Nasdaq-100 indexes.
Supermicro reported somewhat disappointing financial results earlier this week, which sent the stock into a tailspin. But management gave investors at least one piece of potentially positive news: The company will complete a 10-for-1 stock split in late September.
I call that news potentially positive because it could help Supermicro beat the market. Since 1980, the average stock has returned about 25% during the 12-month period following a stock-split announcement, while the S&P 500 has returned 12% over the same period, according to Bank of America.
Wall Street is more optimistic. Supermicro has a median 12-month price target of $995 per share, which implies 89% upside from its current share price of $527. And the most bullish analyst, Ananda Baruah at Loop Capital, thinks the stock could surge 185% to $1,500 per share.
Here's what investors need to know.
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