Super Micro Computer(US:SMCI) The Motley Fool·2024-06-09 12:00Core Insights - Supermicro has seen a stock rally of over 2,000% in the past three years, while C3.ai's stock has declined more than 50% during the same period [1] - C3.ai's revenue growth has significantly slowed, with a 38% increase in fiscal 2022 followed by only a 6% rise in fiscal 2023, attributed to competition and macroeconomic challenges [2] - Supermicro's revenue and earnings rose 37% and 115% respectively in fiscal 2023, driven by high demand for AI servers [5] Company Performance - C3.ai's revenue growth accelerated to 16% in fiscal 2024 after a challenging fiscal 2023, but it still faces customer concentration issues and high valuation concerns [2][3] - Supermicro is expected to see revenue and earnings soar by 110% and 102% respectively in fiscal 2024 as the AI market expands [5] - C3.ai generates over 30% of its revenue from a joint venture with Baker Hughes, which is set to expire in April 2025, necessitating a renewal for continued growth [9] Market Position - Supermicro holds a smaller share of the server market compared to Dell Technologies and Hewlett Packard Enterprise but specializes in high-performance liquid-cooled servers [4] - Supermicro's share of the dedicated AI server market is projected to increase from 10% to 17% within the next three years as the overall market expands by 150% [12] - C3.ai's stock is considered expensive at nearly 10 times this year's sales, and it remains unprofitable by both GAAP and non-GAAP measures [10] Competitive Landscape - Supermicro benefits from a partnership with Nvidia, gaining access to top-tier data center GPUs, which enhances its competitive edge [11] - C3.ai's shift to consumption-based plans has resulted in less consistent revenue compared to its previous subscription model [2] - Supermicro's stock is viewed as cheaper relative to its growth potential, trading at 22 times forward earnings and 2 times this year's sales [13]