16 Most Undervalued Stocks to Buy Now

11) Super Micro Computer, Inc. (NASDAQ:SMCI)

Forward P/E as of August 22: 18.35x

Number of Hedge Fund Holders: 47

Expected EPS Growth this Year: 58.3%

Super Micro Computer, Inc. (NASDAQ:SMCI) designs, develops, manufactures, and sells server solutions based on modular and open-standard architecture. It provides servers, motherboards, chassis, and accessories.

With higher investments in AI infrastructure, Super Micro Computer, Inc. (NASDAQ:SMCI) continues to benefit from higher orders for memory and storage products. In 2Q 2024, the firm delivered year-on-year growth of 143% in sales to $5.3 billion.

The company was earlier included in the S&P 500 this year. As we know, to be included in this list, a company is required to have positive earnings for 4 consecutive quarters. The massive surge in the stock price was primarily backed by its partnership with NVIDIA Corporation (NASDAQ:NVDA) and the placing of its AI chips in the servers. As a result of such industry trends, the stock gained over ~3000% in 5 years. Now, the company’s board has approved a 10-for-1 stock split.

In the latest fiscal year, the company saw revenues of $14.9 billion, exhibiting a huge rise over its FY 2023 revenue of $7.1 billion. The company’s results were supported by strong demand for its AI servers. Moving forward, Super Micro Computer, Inc. (NASDAQ:SMCI) might post strong sales figure given that it plans to bring a new manufacturing facility in Malaysia online later this year. The company is also quite optimistic about the growing demand for DLC servers. The company believes it can help data center operators reduce energy costs by up to 40%. At the same time, it will also improve computing performance.

As a result, Super Micro Computer, Inc. (NASDAQ:SMCI) decided to quickly add more DLC server rack capacity. This should help the company achieve long-term gains.

Analysts at The Goldman Sachs Group gave the price target of $675.00 and provided a “Neutral” rating for the company on 8^th August. As per Insider Monkey’s 2Q 2024 database, Super Micro Computer, Inc. (NASDAQ:SMCI) was part of 47 hedge funds’ portfolios, up from 35 in the preceding quarter.

Polen Capital, an investment management company, released its second-quarter 2024 investor letter and mentioned Super Micro Computer, Inc. (NASDAQ:SMCI). Here is what the fund said:

“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.”