We recently compiled a list of the 10 Best Performing S&P 500 Stocks So Far in 2025. In this article, we are going to take a look at where Super Micro Computer, Inc. (NASDAQ:SMCI) stands against the other stocks.
Emily Rowland, co-chief investment strategist at John Hancock Investment Management, joined a discussion on CNBC’s ‘Squawk Box’ on February 13 to share her insights on the markets and the upcoming PPI (Producer Price Index) report. She thinks that the S&P earnings are highly underappreciated right now. She noted that the market’s reaction to inflation data has been asymmetric. While higher inflation numbers are often shrugged off, any relief from softer inflation prints tends to cause bigger moves in the markets. This was evident in the response to the CPI (Consumer Price Index) report. Regarding market performance, Rowland highlighted that the S&P 500 earnings were coming in with strong growth (16% year-over-year for the fourth quarter) and this growth is broad-based across sectors like healthcare and utilities. Financials also showed significant gains with a 50% increase.
On discussing President Trump’s announcement of retaliatory tariffs via Truth Social, Rowland said that her team avoids making tactical investment decisions based on political outcomes due to their unpredictability and rapid changes. In terms of attractive sectors for investment within US markets, she highlighted healthcare and industrial companies as promising areas due to their strong fundamentals and potential benefits from ongoing supply chain reshoring activities within the US. While acknowledging political factors can influence sector performance, her strategy focuses on longer-term economic trends rather than short-term political developments when considering investments in key indices like those represented by major US equities such as those found in the S&P 500 index.
Methodology
We first sifted through the Finviz stock screener to compile a list of the best-performing S&P 500 stocks. We then picked the top 10 stocks with the highest year-to-date performance, as of February 17. The stocks are ranked in ascending order of their year-to-date performance. We’ve also added the hedge fund sentiment for each stock which was sourced from Insider Monkey’s database.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A team of technicians in a server room, testing and managing the newest server solutions.
Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 33
Year-to-Date Performance as of February 17: 57.19%
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high-performance server and storage solutions globally. Its offerings range from complete systems and modular blade servers to subsystems, software, and accessories. It serves enterprise data centers, cloud computing, AI, 5G, and edge computing markets. It provides integration, configuration, software upgrades, technical documentation, training, and support services.
Its servers integrate NVIDIA GPUs, which are crucial for AI and data centers. The company recently projected massive revenue growth, forecasting $40 billion in sales by FY26. This outlook is fueled by the demand for AI-optimized servers, particularly those incorporating NVIDIA’s advanced chips, and Super Micro Computer, Inc. (NASDAQ:SMCI)’s direct-liquid cooling (DLC) technology, which is expected to be adopted by a significant portion of new data centers.
While the company did lower its FY25 revenue guidance to between $23.5 billion and $25 billion, from a previous range of $26 billion to $30 billion, this was overshadowed by the long-term projection and positive developments regarding its financial reporting. Its stock recently surged following news of Meta Platforms’ investment in robotics. This could further increase demand for Super Micro Computer, Inc. (NASDAQ:SMCI)’s servers. Analysts have raised their price targets on the stock, reflecting the company’s potential in the expanding AI infrastructure market. For instance, Wedbush analysts raised the stock price target on this company to $40 from $24 and reaffirmed a neutral rating.
Carillon Eagle Small Cap Growth Fund stated the following regarding Super Micro Computer Inc. (NASDAQ:SMCI) in its first quarter 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) provides accelerated computing platforms that are application-optimized, high performance, and high-efficiency server and storage systems for end markets such as cloud computing and artificial intelligence (AI). The company delivered impressive financial results and provided strong guidance that reflected the increasing demand for the infrastructure that supports artificial intelligence. After the report, the stock notably traded higher as investors grew more enthusiastic about the growth prospects aligned with the critical role the company plays in the development of data centers.”
Overall SMCI ranks 2nd on our list of the best performing S&P 500 stocks so far in 2025. While we acknowledge the potential of SMCI as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SMCI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and Complete List of 59 AI Companies Under $2 Billion in Market Cap.
Disclosure: None. This article is originally published at Insider Monkey.
