20 Trending AI Stocks on Latest News and Analyst Ratings

6. Super Micro Computer, Inc. (NASDAQ:SMCI)

Number of Hedge Fund Holders: 47 

Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. Mizuho analyst Vijay Rakesh recently started coverage of the stock with a Neutral rating and a price target of $450. In an investor note, the analyst underlined that the artificial intelligence server market was growing at a 54% compound annual rate, but increased competition was hitting margins, and the stocks of companies that had diverse portfolios stood to benefit more, especially if margins compressed even further, if server architectures were slow to adopt liquid-cooling in favor of cheaper air-cooled servers and as GPU supply improved.

The analyst further added that Super Micro Computer, Inc. (NASDAQ:SMCI) faced stiff competition from Dell in the AI server market. Rakesh noted that while AI was a secular driver, diversification across PC/storage generated synergies and value longer term for Dell, even though SMCI had led the market with a 70-80% share with a head start from tight GPU supply, it was now losing share with Dell quickly gaining by leveraging relationships as the server leader.