Super Micro Computer(US:SMCI) The Motley Foolยท2024-10-12 21:11Core Viewpoint - Supermicro's stock has experienced significant volatility due to a disappointing earnings report, scrutiny from a short-seller, a delayed 10-K filing, and a potential DOJ investigation, but it has seen a rebound following a press release about its GPU shipment volume [1][2]. Company Performance - Supermicro is currently shipping over 100,000 GPUs per quarter, specifically utilizing direct liquid cooling (DLC) solutions for large data centers focused on AI applications [3][4]. - The company does not design or manufacture GPUs but assembles servers and rack solutions using purchased components [4]. - Supermicro offers lower-priced servers compared to branded competitors like Dell, while being one of the first to adopt DLC technology, providing a competitive edge [5][6]. Financial Metrics - The company has low gross margins, which have recently declined to 11.2% from 17.0% a year ago, contrasting sharply with Nvidia's 75% and Taiwan Semiconductor's 53% gross margins [7]. - Supermicro's stock trades at 14 times analysts' fiscal 2025 earnings estimates, suggesting it may be undervalued given the growth potential in AI infrastructure [11]. Market Context - Despite recent challenges, Supermicro is positioned to benefit from the substantial investments in AI infrastructure, as large tech companies are aggressively acquiring GPUs [10]. - The stock's valuation reflects its current market position, but uncertainties regarding its annual report and the DOJ investigation present risks [12].