7. Super Micro Computer Inc. (NASDAQ:SMCI)
Number of Hedge Fund Investors: 47
Jim Cramer comments on the recent volatility of Super Micro Computer Inc. (NASDAQ:SMCI), a partner of NVIDIA Corporation (NASDAQ:NVDA). He notes that Super Micro Computer Inc. (NASDAQ:SMCI) dropped from $404 to $386 on Friday, impacted by a report from short-seller Hindenburg accusing the company of aggressive accounting practices. However, Super Micro Computer Inc. (NASDAQ:SMCI) rebounded to nearly $410 today. Cramer questions whether this rebound is significant or just a brief fluctuation, suggesting that the recent price movements might not provide clear insight into the company’s true performance.
“How about this absurdity: Super Micro, fell from $404 to $386 on Friday, still hobbled by a report from short-seller Hindenburg about the company’s aggressive accounting. Then today, Super Micro bounced back to almost $410 again. Either the climb was meaningless, or the rebound is meaningless, or both are meaningless. We don’t know.”
Super Micro Computer Inc. (NASDAQ:SMCI) is a strong investment option due to its significant growth in the AI and high-performance computing markets. Super Micro Computer Inc. (NASDAQ:SMCI) has excelled in AI server infrastructure, driven by a rise in demand for AI applications. For fiscal year 2024, Super Micro Computer Inc. (NASDAQ:SMCI) reported a remarkable 143% increase in revenue, reaching $5.31 billion. Although net income grew by 82%, profit margins have narrowed as Super Micro Computer Inc. (NASDAQ:SMCI) has focused on gaining market share through competitive pricing.
Looking forward, Super Micro Computer Inc. (NASDAQ:SMCI) expects revenue to double in fiscal 2025, forecasting between $26 billion and $30 billion. Analysts anticipate impressive growth rates for Super Micro Computer Inc. (NASDAQ:SMCI), with revenue and earnings per share expected to increase at annual rates of 58% and 52%, respectively, from 2023 to 2026. Super Micro Computer Inc. (NASDAQ:SMCI)’s expanding partnerships with Nvidia, AMD, and Intel strengthen its position in the rapidly growing AI market.
Additionally, the planned 10-for-1 stock split on October 1, 2024, could make Super Micro Computer Inc. (NASDAQ:SMCI) more appealing to investors by lowering its price per share. Despite facing competition from larger companies like Dell Technologies Inc. (NYSE:DELL) and Hewlett Packard Enterprise Company (NYSE:HPE) and dealing with margin pressures, Super Micro Computer Inc. (NASDAQ:SMCI)’s strong market presence and ambitious growth plans make it a promising long-term investment.
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.”
