Super Micro Computer (NASDAQ:SMCI) has recently announced its plans to incorporate direct liquid cooling technology into server racks, a move that is expected to improve the efficiency of data centers and reduce operating costs. This innovative approach to cooling technology caused shares to rise nearly 5% in Wednesday’s trading session.
The use of liquid as a coolant in technology has been around for a while, with things like engines and machine guns utilizing liquid cooling for decades. However, this concept is relatively new for Super Micro and could have a significant impact. By implementing this cooling system in nearly one-third of its racks next year, Super Micro positions itself to capitalize on the growing trend of data centers due to the increased use of artificial intelligence (AI) and other applications.
Beyond just fancy coolant systems, Super Micro is also focused on developing new servers using Xeon 6 processors with E-cores. These servers will include edge servers, multi-node systems, and rackmount systems to cater to different levels of demand, from entry-level to full enterprise use.
Analysts on Wall Street have a Moderate Buy consensus rating on SMCI stock, with six Buys and four Holds assigned in the past three months. Following a 247.43% increase in share price over the past year, the average price target of $1,098 per share suggests a 36.79% upside potential for SMCI stock.