Current price – $772 Target price – $1059 Growth potential – 37.2% 🔥 Investment horizon – 1 year
Super Micro Computer is an American company and a major manufacturer of server hardware. Super Micro Computer's products are actively used for artificial intelligence (AI) technologies as they work with NVIDIA chips. The company's stock has shown outstanding growth over the past 12 months (+244%), supported by business expansion.
Investment Thesis
🔼 Strong Financial Performance. Super Micro Computer demonstrated outstanding results for the Q3 2024 fiscal year (Q1 2024). The company's revenue grew by more than 200% y/y to $3.85 billion. Diluted earnings per share (EPS) jumped 329% to $6.56.
🔼 Exceptional Prospects. The company is optimistic about the future, raising its revenue forecast for 2024 fiscal year from $14.3-14.7 bln to $14.7-15.1 bln. Taking the average value of the range, this implies a growth of 582% compared to the previous fiscal year. The recently published strong report from NVIDIA supports the thesis of continuing explosive growth in demand for AI technology equipment, which is also positive for Super Micro Computer.
🔽 Risks. Super Micro Computer is quite highly valued by the market, which implies expectations of high revenue and EPS growth rates. If they turn out to be not as strong, this could trigger a wave of stock sales.
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