#2 - Super Micro Computer (NASDAQ:SMCI)
Up 119% in 2024, Super Micro Computer Inc. (NASDAQ: SMCI) is delivering NVIDIA-like performance and for good reason. Super Micro is a companion stock to NVIDIA because it provides the servers that house GPUs, Central Processing Units (CPUs), and the like.
However, unlike GPUs, servers are notoriously low-margin businesses. That’s one reason that SMCI stock dropped nearly 20% after its August 2024 earnings report. The company’s gross margin fell by 6% year-over-year (YOY).
But context is crucial to understand what this means for Super Micro. When you’re trying to understand the potential of AI, data centers will be a massive part of that story. The servers in data centers require constant cooling. Super Micro uses liquid cooling technology, which is more efficient than air cooling, and has been willing to sacrifice its short-term margins for market share growth.
As of August 20, 2024, SMCI stock is trading near the middle of its 52-week range. But analysts have a price target that suggests there could be 49% stock price growth in the next 12 to 18 months.
About Super Micro Computer
Super Micro Computer, Inc, together with its subsidiaries, develops and manufactures high performance server and storage solutions based on modular and open architecture in the United States, Europe, Asia, and internationally. Its solutions range from complete server, storage systems, modular blade servers, blades, workstations, full racks, networking devices, server sub-systems, server management software, and security software.
Read More - Current Price
- $41.88
- Consensus Rating
- Hold
- Ratings Breakdown
- 6 Buy Ratings, 11 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $7.26 (82.7% Downside)
