We recently published a list of 17 Trending AI Stocks on Latest Analyst Ratings and News. In this article, we are going to take a look at where Super Micro Computer, Inc. (NASDAQ:SMCI) stands against the other trending AI stocks.
The AI industry continues to be highly dynamic, with significant growth anticipated across various sectors in 2024. The expansion of generative AI, which saw exponential growth in 2023, is expected to continue this year, potentially unlocking trillions of dollars in value as businesses move from pilot projects to broader implementation. This shift suggests that 2024 will be a pivotal year for AI as companies aim to leverage capabilities more fully to drive efficiency, reduce costs, and innovate across different industries. The market for generative AI is forecasted to grow rapidly, with a compound annual growth rate of close to 60%, reaching a valuation of around $37 billion by 2028. This growth is fueled by the widespread adoption of AI technologies in areas such as healthcare, finance, and customer service.
Read more about these developments by accessing 33 Most Important AI Companies You Should Pay Attention To and Billionaire Druckenmiller is Betting on AI
The AI revolution is already transforming operations across the world by automating tasks, analyzing large datasets, and enhancing predictive capabilities. The healthcare sector, for example, is poised for substantial advancements due to AI, with the market expected to grow to around $188 billion by 2030, driven by innovations in genomics, drug discovery, and personalized medicine. Edge computing is another area likely to see significant development in 2024, as it becomes increasingly critical for enabling AI applications that require real-time data processing. The move towards edge computing, where data is processed closer to the source, is expected to reduce latency and improve the performance of AI systems, particularly in sectors like autonomous vehicles, IoT, and industrial automation.
This trend underscores the growing importance of a robust semiconductor supply chain, especially as global trade tensions and geopolitical events continue to impact the availability of critical components like chips. Experts also emphasize the growing importance of ethical considerations and responsible AI. As AI technologies become more deeply embedded in various aspects of society, concerns around privacy, bias, and security are likely to intensify, prompting calls for clearer regulatory frameworks and guidelines to ensure that AI is developed and deployed responsibly. The rapid growth will also bring challenges related to talent acquisition, supply chain management, and the need for responsible AI practices. As such, the industry is likely to be marked by both tremendous opportunities and complex challenges in the near term.
READ ALSO 10 Best Small-Cap AI Stocks to Buy and 10 Tech Stocks to Monitor Amid Market Volatility According to Bernstein Analyst.
Our Methodology
For this article, we selected AI stocks based on the latest news and analyst ratings. These stocks are also popular among hedge funds. 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 macro view of a 5G/4G chips and modules, displaying the cutting edge technology of the company.
Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Holders: 47
Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high performance server and storage solutions based on modular and open architecture. The stock has nosedived since the company announced earlier this week that it would not be able to complete the annual 10k filing with authorities in the US. The filing details important business numbers for the fiscal year. The news came on the heels of a report by Hindenburg Research, an investment firm with a focus on activist short selling, that detailed that it had taken a short position on the chip firm because of glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export control failures, and customer issues.
This bearish view on Super Micro Computer, Inc. (NASDAQ:SMCI) is shared by analysts on Wall Street. Wells Fargo recently lowered the price target on the stock to $375 from $650 and kept an Equal Weight rating, highlighting that the stock was under significant pressure following the announcement that it will not file the fiscal 2024 report on time. In an investor note, the advisory further added that given this uncertainty and concern over revenue recognition, as well as the history of the chipmaker in this regard, the price target reduction was warranted.
Overall, SMCI ranks 7th on our list of our list of trending AI stocks on latest analyst ratings and news. While we acknowledge the potential of Super Micro Computer, Inc. (NASDAQ:SMCI) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than Super Micro Computer, Inc. (NASDAQ:SMCI) but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
