7. Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders as of Q4: 45
Navellier & Associates’ Equity Stake: $11.46 Million
Upside Potential as of April 23: 46.9%
Super Micro Computer, Inc. (NASDAQ:SMCI), commonly known as Supermicro, is an American information technology company headquartered in San Jose, California. It specializes in the design, development, manufacturing, and sales of high-performance server solutions based on modular and open-standard architectures. The company has become a key player in the technology hardware industry, with a market capitalization of approximately $23 billion by the end of December 2024. Supermicro’s innovative approach to server infrastructure, particularly in AI-driven platforms, continues to fuel its rapid expansion and strong financial performance.
For the second quarter of fiscal year 2025, which ended on December 31, 2024, Super Micro Computer, Inc. (NASDAQ:SMCI) reported impressive preliminary financials, primarily driven by surging demand for its AI-related systems. The company expects to report net sales between $5.6 billion and $5.7 billion, marking a 54% year-over-year increase at the midpoint. Gross margins, both GAAP and non-GAAP, are projected to fall between 11.8% and 11.9%. The company anticipates 5% year-over-year growth in diluted earnings per share, which are forecasted to be between $0.58 and $0.60.
At the end of the quarter, Super Micro Computer, Inc. (NASDAQ:SMCI) reported total cash and cash equivalents of approximately $1.4 billion, against total debt of $1.9 billion. Of this, around $200 million consists of bank debt, while the remainder comprises convertible notes. Looking ahead, the company projects net sales for the third quarter of FY2025 to range between $5.0 billion and $6.0 billion. It expects non-GAAP diluted earnings between $0.46 and $0.62, reflecting continued operational strength despite shifting macroeconomic conditions.
Supermicro recently revised its full-year 2025 revenue guidance to a range of $23.5 billion to $25 billion, down from its prior estimate of $26 billion to $30 billion. Despite this adjustment, the company maintains an ambitious long-term vision, targeting $40 billion in revenue for FY2026, an anticipated 65% year-over-year increase. Financial analysts remain bullish on the stock, with a price target of $48.33 and an implied upside potential of 46.9%. Super Micro Computer, Inc. (NASDAQ:SMCI) is hence listed as one of Louis Navellier’s top stock picks with huge upside potential.
Columbia Acorn Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q3 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) had a tough quarter due to a confluence of negative events. It declined, but is still up significantly for the year. While demand for the company’s AI server racks remains strong, with revenue up over 100%, gross margins have fallen sharply for two straight quarters, implying a price war. In addition, Super Micro was the subject of a short-seller report and a delay in filing its annual report with the SEC. We have been taking profits in the stock all year and have only a small position, which we are maintaining given the strong performance and demand for Super Micro’s AI racks and a depressed stock valuation.”
