10 Stocks Jim Cramer Thinks You Should Check Out

4. Super Micro Computer Inc. (NASDAQ:SMCI)

Number of Hedge Fund Investors: 47

Jim Cramer expresses skepticism about Super Micro Computer Inc. (NASDAQ:SMCI). He initially thought the Hindenburg report was solid but became less enthusiastic after Super Micro Computer Inc. (NASDAQ:SMCI) filed additional information the next day. While Cramer acknowledges that Super Micro Computer Inc. (NASDAQ:SMCI) has potential, he is concerned about the company’s need to improve its accounting practices, as highlighted by the Hindenburg report.

“I’m not a believer in this, to be honest. I thought the Hindenburg report was good. I wouldn’t have been as enthusiastic if it weren’t for that filing the company made the next day. I think Super Micro is good, but when you read the Hindenburg report, it’s clear they need to improve their accounting practices, and that’s what worries me.”

Super Micro Computer Inc. (NASDAQ:SMCI)’s recent financial performance has been impressive, with Q3 FY2024 revenue reaching $3.85 billion, fueled by high demand for its high-performance computing and AI infrastructure. By managing its operating expenses effectively, Super Micro Computer Inc. (NASDAQ:SMCI) has improved its earnings before interest and taxes (EBIT).

Analysts are optimistic, predicting a potential 72% increase in the stock price and revenue growth to $15.23 billion in 2024, with long-term revenue possibly hitting $24.1 billion by 2029. Additionally, being included in the S&P 500 index has enhanced investor confidence and spotlighted its competitive position. Super Micro Computer Inc. (NASDAQ:SMCI)’s Rack Scale Total Solution for AI storage is a standout product that aligns with the rising demand for AI systems.

Despite some concerns about cash burn and share dilution, Super Micro Computer Inc. (NASDAQ:SMCI)’s strong revenue growth, positive analyst projections, and strategic focus on AI and cloud computing make it a promising investment with significant growth potential.

Polen U.S. Small Company Growth Strategy stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q2 2024 investor letter:

“The second largest contributor to the Portfolio’s relative performance was Super Micro Computer, Inc. (NASDAQ:SMCI), a provider of high- performance, energy-efficient servers, which the Portfolio does not own. The stock declined notably in the quarter, providing a tailwind to relative performance. On a YTD basis, however, Super Micro is still our largest relative detractor, given its robust 1Q return.”