Core Viewpoint - Supermicro is currently outperforming Nvidia in stock performance, with a year-to-date increase of nearly 200% compared to Nvidia's 154%, driven by strong demand for AI-related products and services [15]. Group 1: Company Performance - Supermicro's revenue grew by 200% year over year in its third-quarter fiscal year 2024, reflecting strong demand, although its quarter-over-quarter growth was only 5% [9][10]. - The company is trading at a forward earnings multiple of 12, significantly lower than Nvidia's 40, indicating a more attractive valuation for investors [4][11]. - Supermicro is recognized as the top-performing component in the S&P 500 for 2024, highlighting its strong market position [7]. Group 2: Market Dynamics - The growth of both Supermicro and Nvidia is driven by the increasing demand for GPUs used in AI model training, with Supermicro providing the necessary server infrastructure [1][2]. - Supermicro's customizability in server design allows it to cater to a wide range of client needs, setting it apart from competitors [2]. - The valuation discrepancy between Supermicro and Nvidia has been a key factor in their respective performances in 2024, with Supermicro's lower valuation allowing for potential upside without needing to meet overly high expectations [12][14].

Although Super Micro Computer stock has rallied over the past month, rising 15% to $895 per share, shares of the premier provider of AI-optimized computers, servers, networks, storage solutions and data center workstations remains depressed. Super Micro Computer (NASDAQ:SMCI) has largely been trading sideways since its big drop began in March. Having hit an all-time high $1,229 per share, it really tumbled hard after full-year earnings suggested a slowdown was coming. Since then, the stock remains 3.5% belo ...

Core Viewpoint - Super Micro Computer has experienced a significant earnings boost of over 600% and projects revenue of $5.5 billion amid the growing demand for AI technologies, positioning itself as a leader in the AI server market [1][14]. Revenue Growth - The company reported a staggering 200% increase in revenue for the fiscal third quarter of 2023, totaling $3.85 billion, up from less than $2 billion in 2021 [14]. - Current 12-month trailing revenue stands at $11.8 billion, with management projecting a compound annual growth rate of 16%, potentially leading to earnings of up to $1.70 billion [5][11]. - Projected fourth-quarter revenue is expected to increase by 133% to 152%, ranging between $5.10 billion and $5.50 billion [14]. Earnings Performance - Net income surged 367% year-over-year to $402 million in Q3, with earnings per share rising from $1.63 to $6.65 [9]. - The company achieved a record high net income of $600 million in its fiscal third quarter of 2023 [14]. Market Position and Strategy - Super Micro Computer specializes in AI cooling solutions and customized server products, which helps mitigate risks from economic cycles and competition [3]. - The company is strategically positioned to capitalize on the AI market, which is projected to grow to $430 billion by 2033 [14]. - Management aims to reach $25 billion in recurring revenue across all product lines over the next five years, focusing on IT rack solutions powered by advanced GPUs and CPUs [11]. Technological Innovations - The company has integrated advanced technologies from Nvidia, Intel, and AMD into its server products, enhancing performance and efficiency [9]. - Super Micro Computer is developing a ready-to-deploy liquid-cooled AI data center solution optimized for Nvidia's AI Enterprise software platform [10]. - The new liquid cooling technology is expected to enhance data center efficiency by up to 40% and support the growing demand for AI applications [10]. Competitive Landscape - Despite a year-to-date stock increase of over 190%, the stock trades at a price-earnings multiple of 23, which is considered a discount compared to peers like Nvidia [11][13]. - The overall server market is expected to grow at a rate of 8.4% over the next five years, indicating a favorable environment for Super Micro Computer's continued expansion [4].

Despite the massive growth that the company has seen recently, many analysts consider the contraction in multiples and price from the March 2024 high to be a buying opportunity. I do not disagree that buying at the present price could lead to significant alpha if my outlined growth catalysts come to fruition, which I mentioned above and am bullish about. If we are to take Wall Street's word for it and then be slightly more optimistic based on my macro outlook, a reasonable revenue CAGR could be 27.5% over t ...

The hardware firm specializes in various products and equipment for data centers, which have seen in an explosion of growth over the past decade. If you have been reading about the deployment of AI algorithms, data centers are a critical component of that. With that said, below are three reasons SMCI stock remains a great stock play on AI. Generative artificial intelligence careened into the social zeitgeist in late 2022 with the public release of OpenAI's ChatGPT. The power and depth of this generative AI ...

The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates three times over this period. Valuation Super Micro is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade. Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair va ...

Thanks @elonmusk for leading the liquid cooling technology to large AI data centers! This may lead to preserving 20 billion trees for our planet❤️ pic.twitter.com/oJ48Dw3YVF That's a nice tweet, and certainly indicative that Super Micro's customer base is fast growing. SMCI Stock Higher on Musk Partnership In late June, news broke that Musk's xAI would be partnering with Super Micro to provide hardware that the AI company needs for its supercomputer. The tweet from Liang furthers that catalyst. On the date ...

Despite the pullback and volatility seen in SMCI stock during the just completed second quarter, the company's share price is up 188% year to date, making it the best performing stock in the benchmark S&P 500 index. Super Micro Computer makes data centers that power artificial intelligence models and applications. To say that the company's products are in high demand is an understatement. The maker of high-efficiency servers reported first-quarter EPS of $6.65 compared to $5.78 that was expected among analy ...

Sustaining such gains is an ambitious but not impossible goal. However, a key partnership with Nvidia has changed the game for Supermicro (as the company is commonly called). Consequently, its stock is up 190% in the first half of this year. With its massive gains, investors are right to ask whether that momentum can continue through the second half of 2024. Supermicro is a technology hardware company known for producing energy-saving, environmentally friendly tech products for the cloud, metaverse, and oth ...

While most investors are gravitating toward chip leader Nvidia (NVDA -0.36%) at the moment, AI is and will continue to mint other market winners as well. In fact, one S&P 500 AI company has outperformed even Nvidia this year. And despite this stock's impressive 2024 run, one Wall Street analyst predicts another 70% surge. Supermicro has undoubtedly benefited handily from a close partnership with Nvidia as a preferred server partner. However, the company has also been gaining market share thanks to its in-ho ...