8 Best Cheap Growth Stocks To Invest In Now

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

Forward P/E Ratio: 12.51

Earnings Growth This Year: 52.90%   

Number of Hedge Fund Holders: 47

If you are looking for a growth stock that is trading at a cheap valuation and is riding the AI wave successfully, you might want to add Super Micro Computer, Inc. (NASDAQ:SMCI) to your watchlist.

Super Micro Computer, Inc. (NASDAQ:SMCI) has developed a new growth catalyst in the shape of artificial intelligence. The company has gained an indispensable position in the market with its liquid cooling clusters, next-gen X14 Intel Xeon 6, and H14 AMD Turin systems. The company has been witnessing a sharp increase in its revenue and net income for the past 3 years. During this time it has grown its bottom line by 121% and top line by 61% indicating that AI is a strong catalyst for its growth.

The most recent quarter i.e. fourth quarter of 2024 was also a success. The tech company ended the fiscal year with almost $14.9 billion in revenue indicating 2x growth from the previous year. Management expects even stronger growth during the next fiscal year and their expectations are backed by a record high number of orders and a growing backlog of design wins.

Carillon Scout Mid Cap Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q2 2024 investor letter:

“Super Micro Computer, Inc. (NASDAQ:SMCI) was the top detractor to returns in the second quarter. Super Micro designs and manufacturers server solutions based on modular and open-standard architecture. This modular approach combined with a strong engineering culture helps the company to supply the market with advanced servers and rack-scale compute solutions quickly. After an impressive return in the first quarter, the company offered disappointing near-term earnings guidance, though we do not believe its long-term opportunity has diminished. We expect continued strong growth for several years, although the range of outcomes is quite wide; it is difficult to forecast AI server market growth with precision.”