3 Reasons Super Micro Computer Stock Is Still a Great AI Play

InvestorPlace2024-07-09

Super Micro Computer‘s share price has continued to skyrocket well into 2024, even outpacing AI chip giant Nvidia.A close relationship with Nvidia and critical server hardware products, such as ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n3 Reasons Super Micro Computer Stock Is Still a Great AI Play\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-07-09 17:05 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://investorplace.com/2024/07/3-reasons-super-micro-computer-stock-is-still-a-great-ai-play/><strong>InvestorPlace</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Super Micro Computer‘s share price has continued to skyrocket well into 2024, even outpacing AI chip giant Nvidia.A close relationship with Nvidia and critical server hardware products, such as ...</p>\n\n<a href=\"https://investorplace.com/2024/07/3-reasons-super-micro-computer-stock-is-still-a-great-ai-play/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":null,"symbol_name":null,"start_time":0,"source_url":"https://investorplace.com/2024/07/3-reasons-super-micro-computer-stock-is-still-a-great-ai-play/","article_id":"2450508044","we_media_id":null,"thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2450508044","pubTimestamp":1720515907,"columns":[],"sourceInfo":{"source_id":"investorplace_stock_picks","name":"InvestorPlace stock picks"},"weMediaInfo":null,"summary":"The market may have you believe the AI trade of the year is NVDA, but Super Micro Computer stock is outperforming the chipmaker in 2024.","collect":0,"end_time":0,"defaultTopTitle":"investorplace.com","property":[],"viewcount":null,"language":"en","relate_stocks":{},"translate_title":"超微计算机股票仍然是人工智能热门股票的3个原因","themeId":"","isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SMCI":1.1},"content_text":"Super Micro Computer‘s share price has continued to skyrocket well into 2024, even outpacing AI chip giant Nvidia.A close relationship with Nvidia and critical server hardware products, such as cooling systems, have led to the company’s meteoric revenue and earnings growth. Despite a surge in share price, Super Micro Computer stock’s trading multiple doesn’t look stretched and hasplenty of room for multiple expansion. Source: rafapress / Shutterstock.comWhile the market is obsessing over chipmaker Nvidia, there are other semiconductor and hardware companies to look into that have solid exposure to artificial intelligence (AI) technologies. One of them is Super Micro Computer.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.SMCI’s edge has been to quickly deploy AI productsGenerative 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 platform and others that spawned after its release incited a rise in investment into AI-enhanced products.To deploy such technologies, however, advanced infrastructure solutions are required. That’s where a relatively small company like Super Micro Computer comes in. Founded in the early 1990s, Super Micro has spent years designing server products and network devices to make data centers efficient nexuses of processing power.Close ties with chipmaker Nvidia have given Super Micro an edge on competitors like Dell and Hewlett Packard in terms of rapid deployment of AI products such as the high-power H100 and H200 GPUs as well as the GPU interconnects they necessitate.Analysts have noted Super Micro’s efficient production capabilities allow it to “manufacture, assemble, test and ship a server” rack in just a few weeks. Market-watchers and analysts also credit the firm with having the “widest” product portfolio, allowing it to quickly service enterprises that leverage new GPUs from Nvidia or its chip-making competitors.To help facilitate power efficiencies for data centers, Super Micro offers best-in-class cooling systems, which help to offset the high temperatures that advanced AI chips tend to reach once in use.The firm’s earnings seasons are marked by strong growthGiven Super Micro’s unparalleled position in its respective end markets, the server hardware firm enjoyed strong earnings growth in recent quarters. The firm’s second-quarter earnings print for fiscal year 2024, ended Dec. 31, reported quarterly revenue of $3.7 billion, representing growth of more than 103% on a year-over-year basis and 73% growth on a sequential basis. Demand for AI computer products as well as Super Micro’s IT solutions propelled the firm’s financial figures to historic heights.Third-quarter results for fiscal year 2024, which ended on March 31, were also astounding. Super Micro reported net sales of $3.8 billion, nearly tripling from the same period in 2023.While there is certainly a customer concentration risk for investors holding SMCI, the company’s unfettered growth is jaw dropping.Despite sizable gains, SMCI has a great trading multipleNow it’s time to run through Super Micro Computer stock’s valuation metrics, and many investors might be surprised. Despite its share price skyrocketing nearly 250% in 2023, SMCI remains relatively undervalued to some other large tech firms, especially AI chipmakers like Nvidia or Advanced Micro Devices. In 2024, SMCI has risen 216%, yet its forward price-to-earnings ratio is around 26.3x forward earnings.In a stock market where technology multiples have become increasingly stretched, Super Micro Computer stock does look like a bargain. With the AI craze unabated, Super Micro’s top-line and earnings growth will likely continue to crush estimates, which could lead to more gains for current shareholders.","kind":"highlight","is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":6,"commentSize":0,"repostSize":1,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.30.2","shortVersion":"4.30.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2450508044"}