Super Micro Computer Joins Nasdaq-100 Index: A New AI Stock to Watch

Meet the Newest Artificial Intelligence (AI) Stock in the Nasdaq-100. Buy It Before Nvidia Stock, According to Wall Street.

Supermicro has become popular with investors in recent months due to its role in the artificial intelligence (AI) economy. The company joined the S&P 500 (SNPINDEX: ^GSPC) in March, and shares surged 188% during the first half of 2024, outpacing the 150% gain in Nvidia stock. Wall Street thinks that outperformance will continue. Supermicro's median price target of $1,030 per share implies 16% upside from its current share price of $886. Meanwhile, Nvidia's median price of $133 per share implies 4% upside from its current share price of $128. Super Micro Computer has a durable competitive advantage Super Micro Computer designs and builds computing platforms for enterprise and cloud data centers. Its portfolio spans storage systems and servers, including single devices and full-rack solutions, optimized for AI and high-performance computing. The company has a deep relationship with Nvidia, but it also sources chips from suppliers like AMD and Intel. Supermicro is the "leading company in the AI compute market," according to JPMorgan Chase analyst Samik Chatterjee. More importantly, it's quickly gaining market share due to engineering prowess and its unique building-block approach to product development. To elaborate, the company handles most research and development internally, and it builds preassembled servers that can quickly be outfitted with the latest chips and interconnects. As a result, Supermicro can usually bring new technologies to market faster than competitors, often by two to six months. Additionally, because those server building blocks can be assembled in countless combinations, clients have a great deal of flexibility in buying custom computing platforms. In fact, Supermicro claims to offer the broadest product portfolio in the industry. Earlier this year, Rosenblatt Securities analyst Hans Mosesmann highlighted those advantages in a note to clients, saying: "Super Micro has developed a model that is very, very quick to market. They usually have the widest portfolio of products when a new product comes out from Nvidia or AMD or Intel." Supermicro has also developed building blocks for liquid-cooled AI servers, and it's one of the first companies to ship liquid-cooled racks at scale. That puts Supermicro in a good spot. Liquid cooling can reduce data center power usage by 40%, and Supermicro expects 15% to 30% of data center installations in the next two years to rely on liquid cooling, up from less than 1% historically. Supermicro stock trades at a reasonable valuation compared to Wall Street's earnings forecast Here's the big picture: Businesses want power-efficient AI servers equipped with the latest chips, especially Nvidia graphics processing units (GPUs), so they are turning to Supermicro. In turn, the company is gaining market share and extending its leadership. Indeed, Bank of America analysts expect Supermicro to account for 17% of AI server sales by 2026, up from 10% in 2023. Even more bullish, Keybanc analyst Tom Blakely says Supermicro could capture 23% market share by 2025. He also says the company has "competitive moats that should sustain if not expand" its share in coming years. Wall Street analysts expect Supermicro to grow adjusted earnings per share at 59% annually through fiscal 2025 (ends June 2025). That estimate makes its current valuation of 46 times adjusted earnings looks very reasonable. In that context, Supermicro has a PEG ratio -- its price-to-earnings ratio divided by forecasted earnings growth -- of roughly 0.78. Using the same methodology, Nvidia currently has a PEG ratio of roughly 1.4, meaning the stock is (arguably) much more expensive. Should you invest $1,000 in Super Micro Computer right now? Before you buy stock in Super Micro Computer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now... and Super Micro Computer wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $791,929!* Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Bank of America, JPMorgan Chase, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Supermicro joins Nasdaq 100 Index amid growth By Investing.com

SAN JOSE, Calif. - Super Micro Computer, Inc. (NASDAQ: NASDAQ:SMCI), known for its IT solutions in AI, Cloud, Storage, and 5G/Edge, has been added to the Nasdaq 100 Index. The inclusion in the index, which features 100 of the largest non-financial companies on the Nasdaq, reflects Supermicro's recent performance and market impact. The Nasdaq 100 Index requires its constituents to hold a minimum weighting of 0.1%, a criterion Supermicro recently met, following a period of record highs for the company. Supermicro's President and CEO, Charles Liang, remarked that their entry into the index is recognition of the company's dedication to innovation and customer service, as well as its commitment to sustainable growth and shareholder value. Supermicro's growth trajectory has included significant achievements such as being listed on the S&P 500 and experiencing a notable increase in revenue year-over-year. The company has been actively investing in technology and focusing on customer-centric solutions. Moreover, Supermicro has expanded its manufacturing capabilities to meet increasing demand and improve customer productivity. With a mission to deliver first-to-market innovation, the company has been a key player in Enterprise, Cloud, AI, and 5G Telco/Edge IT Infrastructure. Supermicro designs and manufactures a wide range of products in-house, including server, AI, storage, IoT, and switch systems, as well as software and support services. The company emphasizes green computing, aiming to reduce environmental impact through its Server Building Block Solutions®. While Supermicro's recent press release highlights its ambitions to increase market share with its DLC solutions, this article focuses on the factual achievement of its inclusion in the Nasdaq 100 Index. The information presented here is based on a press release statement from Supermicro, Inc. In other recent news, Super Micro Computer has been the subject of positive analyst projections from Barclays (LON:BARC), which maintains a $1,000 price target on the company. Barclays anticipates an in-line revenue report for the June quarter and expects better-than-expected revenue guidance for the September quarter, primarily due to the deployment of liquid cooling technologies in AI clouds. The firm also suggests that Super Micro Computer could surpass its conservative gross margin guidance for the June quarter, potentially resulting in earnings per share that exceed current expectations. The company's competitive position is deemed strong, especially as the industry transitions into the Blackwell era, a period marked by Super Micro Computer's leading role in liquid cooling technology. Super Micro Computer's allocation of shares for the GB200 is expected to foster further growth in the second half of fiscal year 2025 and beyond. Super Micro Computer and Nvidia Corporation (NASDAQ:NVDA) have been making significant strides in the artificial intelligence sector, with Super Micro being the focus of Wall Street firms. The company's growth is expected to be driven by Tier 2 Cloud providers and high-end enterprises, including Tesla (NASDAQ:TSLA). In other news, the FTSE Russell is preparing for its annual reconstitution, with a significant surge in artificial intelligence-related stocks, including Super Micro Computer and Nvidia, expected to heavily influence the new makeup of its benchmark indexes. These are among the recent developments in the tech sector. Super Micro Computer, Inc. (NASDAQ: SMCI) has not only made headlines with its Nasdaq 100 Index inclusion but also presents an intriguing financial profile according to the latest data from InvestingPro. A robust Revenue Growth of 79.79% over the last twelve months as of Q3 2024 underscores the company's expanding market presence. This growth is further exemplified by a staggering 200.01% quarterly revenue growth in Q3 2024, signaling a strong performance in the recent period. InvestingPro Tips indicate that analysts are bullish about Supermicro's future, with 11 analysts having revised their earnings upwards for the upcoming period, suggesting confidence in the company's ability to sustain its growth trajectory. Moreover, the company is trading at a low P/E ratio relative to near-term earnings growth, with a P/E ratio of 47.13 and a PEG Ratio of 0.73 as of Q3 2024, hinting at a potentially undervalued stock in light of its earnings growth potential. Despite concerns over weak gross profit margins, with a Gross Profit Margin of 15.97% as of Q3 2024, Supermicro's market capitalization has reached a robust 53.28 billion USD, reflecting investor confidence in the company's market position and its role as a prominent player in the Technology Hardware, Storage & Peripherals industry. For readers interested in a deeper dive into Supermicro's financials and future outlook, InvestingPro offers additional insights. There are 17 more InvestingPro Tips available for Super Micro Computer, Inc., which can be accessed for further analysis and investment considerations. Investors looking to leverage these insights can use the exclusive coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription at InvestingPro.

Meet the Newest Artificial Intelligence (AI) Stock in the Nasdaq-100. Buy It Before Nvidia Stock, According to Wall Street. | The Motley Fool

Supermicro has become popular with investors in recent months due to its role in the artificial intelligence (AI) economy. The company joined the S&P 500 (SNPINDEX: ^GSPC) in March, and shares surged 188% during the first half of 2024, outpacing the 150% gain in Nvidia stock. Wall Street thinks that outperformance will continue. Supermicro's median price target of $1,030 per share implies 16% upside from its current share price of $886. Meanwhile, Nvidia's median price of $133 per share implies 4% upside from its current share price of $128. Super Micro Computer designs and builds computing platforms for enterprise and cloud data centers. Its portfolio spans storage systems and servers, including single devices and full-rack solutions, optimized for AI and high-performance computing. The company has a deep relationship with Nvidia, but it also sources chips from suppliers like AMD and Intel. Supermicro is the "leading company in the AI compute market," according to JPMorgan Chase analyst Samik Chatterjee. More importantly, it's quickly gaining market share due to engineering prowess and its unique building-block approach to product development. To elaborate, the company handles most research and development internally, and it builds preassembled servers that can quickly be outfitted with the latest chips and interconnects. As a result, Supermicro can usually bring new technologies to market faster than competitors, often by two to six months. Additionally, because those server building blocks can be assembled in countless combinations, clients have a great deal of flexibility in buying custom computing platforms. In fact, Supermicro claims to offer the broadest product portfolio in the industry. Earlier this year, Rosenblatt Securities analyst Hans Mosesmann highlighted those advantages in a note to clients, saying: "Super Micro has developed a model that is very, very quick to market. They usually have the widest portfolio of products when a new product comes out from Nvidia or AMD or Intel." Supermicro has also developed building blocks for liquid-cooled AI servers, and it's one of the first companies to ship liquid-cooled racks at scale. That puts Supermicro in a good spot. Liquid cooling can reduce data center power usage by 40%, and Supermicro expects 15% to 30% of data center installations in the next two years to rely on liquid cooling, up from less than 1% historically. Here's the big picture: Businesses want power-efficient AI servers equipped with the latest chips, especially Nvidia graphics processing units (GPUs), so they are turning to Supermicro. In turn, the company is gaining market share and extending its leadership. Indeed, Bank of America analysts expect Supermicro to account for 17% of AI server sales by 2026, up from 10% in 2023. Even more bullish, Keybanc analyst Tom Blakely says Supermicro could capture 23% market share by 2025. He also says the company has "competitive moats that should sustain if not expand" its share in coming years. Wall Street analysts expect Supermicro to grow adjusted earnings per share at 59% annually through fiscal 2025 (ends June 2025). That estimate makes its current valuation of 46 times adjusted earnings looks very reasonable. In that context, Supermicro has a PEG ratio -- its price-to-earnings ratio divided by forecasted earnings growth -- of roughly 0.78. Using the same methodology, Nvidia currently has a PEG ratio of roughly 1.4, meaning the stock is (arguably) much more expensive.

What's Going On With AI Server Stock Super Micro Computer On Monday? - Super Micro Computer (NASDAQ:SMCI)

Wall Street expects Taiwan Semiconductor to report a 30% profit growth, boosting Super Micro stock. Super Micro Computer Inc SMCI shares are trading higher Monday after Friday's announcement that the artificial intelligence server company will become a component of the Nasdaq-100 Equal Weighted Index. Last Friday, Nasdaq said Super Micro will join the Nasdaq-100 Index (NDX) and the Nasdaq-100 Equal Weighted Index (NDXE) before the market opens on Monday, July 22, 2024. In both indices, Super Micro will replace Walgreens Boots Alliance Inc WBA. Also Read: Super Micro Computer Stock Soars as AI Server Demand Boosts Market Confidence Super Micro stock also got a boost from Wall Street expecting leading contract chipmaker Taiwan Semiconductor Manufacturing Co TSM to report a 30% growth in second-quarter profit on Thursday. Super Micro stock gained over 201% in the last 12 months. Investors can gain exposure to the stock through SPDR S&P 500 SPY and iShares Core S&P 500 ETF IVV. Price Action: SMCI shares were up 3.19% at $939.00 premarket at the last check Monday. Image via Shutterstock Market News and Data brought to you by Benzinga APIs

Supermicro Joins the Prestigious Nasdaq 100 Index® - Recognition of AI Innovation, Growth, Sustainability, and Global Market Capitalization

Supermicro, Inc. (NASDAQ: SMCI), a Total IT Solution Provider for AI, Cloud, Storage, and 5G/Edge, has been selected to join the renowned Nasdaq 100 Index, which tracks 100 of the largest non-financial companies listed on the Nasdaq, requiring companies to maintain a weighting of at least 0.1% of the index's value. After hitting record highs recently, the Nasdaq 100 index underscores a company's significant impact, profitability, and leadership. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20240715720569/en/ "Supermicro is honored to be included in the acclaimed Nasdaq 100 Index," said Charles Liang, president and CEO of Supermicro. "This milestone is a testament to our relentless dedication, innovative spirit, and unwavering commitment to exceeding customer expectations. We remain focused on driving first-to-market innovation, green computing, leading the emerging AI market, and sustainable growth while creating long-term shareholder value." Learn more about Supermicro at www.supermicro.com. As Supermicro continues to grow, it has achieved significant milestones, including joining the S&P 500, seeing explosive revenue growth year-over-year, continuous investment in technology and customer-centric solutions, and expanding with new manufacturing facilities to meet the growing demand with faster customer productivity. Recently our leading DLC solutions aim to grow our market share from 1% to 30% in one year. About Super Micro Computer, Inc. Supermicro (NASDAQ: SMCI) is a global leader in Application-Optimized Total IT Solutions. Founded and operating in San Jose, California, Supermicro is committed to delivering first-to-market innovation for Enterprise, Cloud, AI, and 5G Telco/Edge IT Infrastructure. We are a Total IT Solutions manufacturer with server, AI, storage, IoT, switch systems, software, and support services. Supermicro's motherboard, power, and chassis design expertise further enable our development and production, enabling next-generation innovation from cloud to edge for our global customers. Our products are designed and manufactured in-house (in the US, Taiwan, and the Netherlands), leveraging global operations for scale and efficiency and optimized to improve TCO and reduce environmental impact (Green Computing). The award-winning portfolio of Server Building Block Solutions® allows customers to optimize for their exact workload and application by selecting from a broad family of systems built from our flexible and reusable building blocks that support a comprehensive set of form factors, processors, memory, GPUs, storage, networking, power, and cooling solutions (air-conditioned, free air cooling or liquid cooling). Supermicro, Server Building Block Solutions, and We Keep IT Green are trademarks and/or registered trademarks of Super Micro Computer, Inc. All other brands, names, and trademarks are the property of their respective owners.

SMCI stock climbs ahead of Nasdaq-100 inclusion By Investing.com

Super Micro Computer (NASDAQ:SMCI) shares climbed in Monday's premarket trading, as investors reacted to the news of the AI server maker's upcoming addition to the Nasdaq-100 Index (NDX). SMCI stock will join the tech-heavy index before markets open on Monday, July 22, replacing pharmacy chain Walgreens Boots Alliance (NASDAQ:WBA), according to an announcement by Nasdaq (NDAQ). Shares climbed more than 3% ahead of the opening bell. Nasdaq announced late Friday that Super Micro (SMCI), an AI server company, will also replace Walgreens (WBA) in the Nasdaq-100 Equal Weighted Index (NDXE) on that date. Walgreens, whose stock has declined by over 60% in the past 12 months, will be removed from other indices, including the Nasdaq-100 Ex-Tech Sector Index (NDXX) and Nasdaq-100 ESG Index, on the same day. In contrast, Super Micro (SMCI), which has surged more than 200% in the past year along with other tech stocks, will be considered for inclusion in indices like the Nasdaq-100 Tech Sector Index (NDXT) at the next quarterly rebalancing. The move follows the recent announcement of SMCI's departure from the Russell 2000, a small-cap stock index, which has shown minimal gains for the year so far, up just about 0.1%, after a 1% increase in the first half of 2024. Starting the year with a market capitalization of just over $15 billion, the company is now valued at around $53.3 billion, with its stock more than doubling. SMCI had become one of the largest holdings in the Russell 2000, representing over 1% of the index's total market value, according to DataTrek. It contributed nearly two percentage points to the index's return in the first half of 2024. Without SMCI, the index would have been in the red for the first six months.

Super Micro Computer Has Outperformed Nvidia Halfway Through 2024. Can It Do the Same to End the Year?

While Nvidia's (NASDAQ: NVDA) performance has been impressive to start the year, it hasn't outperformed one stock in the S&P 500, Super Micro Computer (SMCI -1.35%). So far in 2024, Supermicro is up around 217%, while Nvidia trails it with a 172% rise. Regardless, you're incredibly happy if you've owned either of these stocks. But could Supermicro continue its outperformance to cap off an incredible rise in 2024? Super Micro Computer is another beneficiary of the artificial intelligence arms race While more people are likely familiar with Nvidia than Supermicro, the two companies are clearly benefiting from the same trends. Nvidia's rise has been tied to its best-in-class graphics processing units (GPUs), which are used to train artificial intelligence (AI) models. When companies buy Nvidia GPUs, they don't buy just one or two; they buy hundreds or thousands and connect them together to create a powerful server. But you can't just haphazardly throw them into a room, connect them, and expect peak performance. To maximize performance, they must be properly networked, cooled, and pooled together. That's where Super Micro Computer comes into the picture. Supermicro allows its clients to customize their servers to workload type and size. So, whether you want to create a server setup to run massive AI workloads or a smaller computer tasked with engineering simulations or drug discovery, Supermicro has you covered. The investment thesis behind the stock is fairly simple: GPUs are in high demand, therefore so are the other parts that go into creating these high-powered computers. So far, in 2024, that thesis has been absolutely correct. Supermicro has seen strong demand for its products and grew its revenue by 200% year over year in the third quarter of fiscal 2024 (ending March 31). It is also predicted to have strong growth at the end of the year, with Q4 revenue expected to grow between 133% and 152%. Investors will get guidance for fiscal year 2025 sometime in early August, but Wall Street analysts already have some estimates available. For fiscal year 2025, analysts expect around 61% growth, indicating the strength Supermicro is seeing now should continue. Nvidia has defied all odds in its run-up, as it continues to grow at an unbelievable speed (much faster than Super Micro Computer), post record-breaking margins, and attain an incredibly high valuation. Supermicro isn't in the same class as Nvidia, as it has a relatively slim profit margin (9% versus Nvidia's 53%) due to the highly competitive nature of its business. While Nvidia has game-changing technology that sets it apart from competitors, Supermicro's advantage is its customizability. That's not a great competitive advantage, so its margins are lower and will likely never improve. However, that doesn't mean it can't be a solid stock. With the stock trading at 26 times forward earnings, it's likely fairly valued for its growth and business prowess. As a result, there isn't as much risk valuation as Nvidia, which tips the scales at a pricey 47 times forward earnings. SMCI PE Ratio data by YCharts Because Super Micro Computer is slated to have a strong end to the year and trades at a reasonable price tag, I think it can outlast Nvidia to claim the accolade of 2024's top-performing stock in the S&P 500.