How high can the SMCI stock price go? Feb 21 will be key

The Super Micro Computer (NASDAQ: SMCI) stock price has gone parabolic, as I predicted a while ago. Most recently, the shares have risen in the past nine straight days and is on the cusp of getting to $1,000. It has jumped by more than 260% this year as investors compare its performance to that of Nvidia, the biggest semiconductor company in the world.

Super Micro Computer stock is surging

The reasons for Super Micro Computer stock’s surge are easy to know. As I wrote in my first article on the company, here, it has unique products, which explains why it has outperformed other semiconductor companies in the past few years. 

Shortly thereafter, the company published strong financial results, leading to positive statements from analysts. This rally is also mostly because, as I wrote in this article at macrostreet, the company is actually not overvalued since it is trading at lower multiples than Nvidia and is growing at a faster pace.

Now, the question among many analysts and investors is on how high the shares can go to. First, we need to understand that we are in a bull market, which is evidenced by the fact that the S&P 500 and Nasdaq 100 indices are hovering near their all-time highs. 

In most cases, stocks with a bullish momentum tend to do well when there is a bull market. We saw this in the last bull market as companies like Tesla and Nvidia jumped. 

Most importantly, Super Micro Computer is not about to publish its financial results any time soon. This means that unless there is a major event in the market, the stock has more room to run in the near term.

The most crucial event that could affect the SMCI stock price will be next week’s (Feb 21st) Nvidia earnings. With the company being priced for perfection, any earnings miss will likely lead to a harsh reversal in semiconductor stocks, including Intel and AMD. 

On the other hand, if the company delivers a strong quarter, there is a likelihood that its stock will surge and drag SMCI higher. The main challenge is that it is difficult to forecast how NVDA stock will trade after earnings. It retreated after the last results in November and rallied in the other three.

SMCI stock price forecast

Turning to the daily chart, we see that the Super Micro stock price has gone parabolic in the past few weeks. It has remained above all moving averages but oscillators show that it has become highly overbought.

Now, with the stock testing the resistance at $1,000, and with Nvidia;s earnings coming up, I suspect that there will be a shakeout. This means that the stock could pull back sharply and then resume the bullish trend afterward.