8 Most Undervalued Growth Stocks To Buy According To Wall Street Analysts

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

Forward P/E: 12.32

Earnings Growth: 52.50%

Number of Hedge Fund Holders: 47

Analyst Upside Potential: 54.01%

Super Micro Computer, Inc. (NASDAQ:SMCI) is another technology company that is riding the AI transformation wave. Artificial intelligence has acted as a catalyst to pace up its growth mainly owing to its next-gen X14 Intel Xeon 6, H14 AMD Turin systems, and liquid cooling clusters. These technologies are important components for high-performance servers and storage solutions, which are the backbone of AI and data centers.

If we look at the past 3 years’ performance of Super Micro Computer, Inc. (NASDAQ:SMCI) we see that the company has been able to grow its net income by more than 121%, while growing its revenue by around 61%.

What’s more impressive about the company is its fiscal fourth quarter results. The results showed that the revenue for the year grew more than twice when compared to 2023 and reached $14.9 billion. The company has been landing significant business and design wins which position it for long-term growth. Multi-billionaire and CEO of Tesla, Elon Musk has recently named Super Micro Computer, Inc. (NASDAQ:SMCI) as one of the providers of AI servers for his startup xAI.

The company is also trading at an undervalued price. It is trading at only 12 times its forward earnings, while the S&P market average sits above 24, making it one of the most undervalued growth stocks to buy according to Wall Street analysts.

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.”