Super Micro Computer's AI Server Performance Soars Amid Market Challenges and Opportunities

Super Micro Computer's NVIDIA HGX B200 Systems Show Over "3 Times The Tokens Per Second (Token/s) Generation For Llama2-70b And Llama3.1-405b Benchmarks Compared To H200 8-GPU Systems"

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Super Micro Computer (NASDAQ: SMCI), a major retailer of servers and liquid-cooled AI racks, is surprisingly still up 6 percent so far this year, despite the ongoing carnage across the tech avenue. It is hardly a surprise, therefore that Goldman Sachs recently crowned SMCI as the "best performing stock" in the hardware sphere. Today, Super Micro Computer is out with another stellar development, this time touting the AI performance leadership of its cutting-edge systems that are based on NVIDIA's B200 GPU. To wit, Super Micro Computer is now claiming that its "4U liquid-cooled and 10U air-cooled systems," based on NVIDIA's HGX B200 8-GPU, "demonstrated more than 3 times the tokens per second (Token/s) generation for Llama2-70B and Llama3.1-405B benchmarks compared to H200 8-GPU systems." The company went on to note: "Within the operating margin, the Supermicro air-cooled B200 system exhibited the same level of performance as the liquid-cooled B200 system." Super Micro Computer's NVIDIA HGX B200 systems feature newly developed cold plates and a 250kW coolant distribution unit. These new designs feature vertical coolant distribution manifolds that no longer take up valuable rack space, enabling "eight systems, comprising 64 NVIDIA Blackwell GPUs in a 42U rack, and up to 12 systems with 96 NVIDIA Blackwell GPUs in a 52U rack." The company added: "The new air-cooled 10U NVIDIA HGX B200 system features a redesigned chassis with expanded thermal headroom to accommodate eight 1000W TDP Blackwell GPUs. Up to 4 of the new 10U air-cooled systems can be installed and fully integrated in a rack, the same density as the previous generation, while providing up to 15x inference and 3x training performance." For the benefit of those who might not be aware, U is a standard measurement of server heights, where 1U equals 1.75 inches. Loop Capital recently disclosed that Apple has officially entered the "large server cluster Gen AI game," with the "Siri kerfuffle" prompting a strategy change at the company that now seemingly favors NVIDIA's commercial GPUs: "AAPL [Apple] is in the process of placing orders for ~$1.0B of GB300NVL72's (or ~250 servers at $3.7M - $4.0M each) comprised of both SMCI [Super Micro Computer] & DELL." This order represents another win for Super Micro Computer and Dell, both of whom are currently the leading suppliers of AI server racks.

Prediction: Super Micro Computer Could Be 2025's Best Performing AI Stock

The years-long uptrend in artificial intelligence (AI) stocks may be taking a break, but AI integration isn't slowing down. There's still a ton of work to be done before tech companies and the cloud computing players that support them will have enough AI computing capacity in service to meet the market's needs, and plenty of companies are well positioned to benefit from the infrastructure spending to come. One company that's in a strong position is Super Micro Computer (SMCI 0.06%). It's a key provider of the servers that bring together graphics processing units (GPUs) and other AI accelerator devices with other hardware into the functioning machines that provide computing power to clients. However, the stock was beaten down due to some allegations that the company has since debunked, and it hasn't fully recovered. As such, Supermicro (as the company often refers to itself) offers investors a one-two punch of value and growth. Super Micro Computer has a key technology that its competitors don't When you hear about companies filling data centers with thousands of computing devices, they aren't just haphazardly throwing these devices into a room, connecting them, and calling it a day. They need to be properly connected and cooled; otherwise, they won't run at their full potential and could overheat, causing premature failure. That's why server racks like those from Supermicro are an important piece of the tech puzzle. While the server space is fairly commoditized, Supermicro's direct liquid-cooling (DLC) technology gives it an edge over its competitors, and is one reason why its products have been the preferred racks for mounting Nvidia's cutting-edge GPUs. Because water has a much higher heat capacity than air, it can absorb much more heat, giving Supericro's DLC technology a 40% advantage in energy savings. Additionally, because a server room containing liquid-cooled servers doesn't need as much airflow, a data center can house those servers in a space 20% of the size that air-cooled servers would need. This makes it cheaper to construct data centers. Based solely on this information, you might expect that Supermicro stock would be performing like an all-star player in AI, but it's not. In mid-2024, short-selling firm Hindenburg Research published a short report on Supermicro that accused it, among other things, of accounting fraud. Some drama ensued. Supermicro's auditor, EY, resigned, and the Department of Justice opened a probe, but after all that, a third-party auditing committee investigated the company and found no wrongdoing. Additionally, it brought on respected accounting firm BDO (another giant in the field) to be its new auditor. However, it can take a while for the stock market to forget allegations like those brought by Hindenburg, so the stock's shadowed reputation on Wall Street has lingered. That gives individual investors the chance to potentially get this stock at a bargain price, as it's still valued cheaply relative to the company's rate of growth. Supermicro's in the bargain bin Super Micro Computer is expected to grow significantly over the next few years. Whenever you hear bold predictions about how much AI spending is on track to grow, you can pencil in an assumption that Supermicro will receive a chunk of that growing spending. Because it looks to have so much growth ahead of it, the forward price-to-earnings (P/E) ratio is the best metric by which to value the stock. SMCI PE Ratio (Forward) data by YCharts. Trading at just 13 times forward earnings, Supermicro is dirt cheap compared to the broader market. For reference, the S&P 500 (SNPINDEX: ^GSPC) trades for 21.1 times forward earnings. With the stock starting at such a low point and Wall Street analysts projecting 60% growth in its current fiscal year and 40% growth in its next one, it's safe to say that Supermicro has a ton of potential. Because of that, I wouldn't be surprised if it's one of the best-performing AI stocks moving forward.

Can Super Micro Computer Stock Double in Value Within the Next 5 Years?

Super Micro Computer (SMCI 15.55%), better known as just Supermicro, has been one of the more volatile artificial intelligence (AI) stocks to own over the past few years. Since 2023, it has risen by 300%, and that's even after giving up some significant gains in the second half of 2024 over concerns about its financial reporting and problems with its auditor. With those issues seemingly resolved now and Supermicro's stock trading at a reduced valuation, is the stock a rally candidate going forward? Could the stock price go so far as to double within the next five years, given all the hype surrounding AI? Supermicro still sees a lot of growth ahead With the feverish spending on AI by tech companies, Supermicro saw its business take off. By providing companies with servers and the infrastructure they need to carry out their AI ambitions, Supermicro significantly benefited from the surge in AI-related spending. Although its growth rate has slowed down, it was still more than 50% in its most recent quarter, which covered the last three months of 2024. Data by YCharts. For fiscal year 2025, which ends in June, Supermicro anticipates full-year revenue between $23.5 billion and $25 billion. And the following year, it sees more growth ahead, with its top line hitting $40 billion. With so much more growth ahead, it's not hard to see why Supermicro stock may be poised to rally. Its low valuation could set it up for big gains Shares of Supermicro tanked last year as concerns about accounting issues and the legitimacy of its financial statements weighed on the AI stock. To help resolve the issues, the company ended up changing auditors and was late on reporting quarterly and annual financial reports. While it did rally after seemingly putting those issues to rest, Supermicro stock hasn't fully recovered. The stock price remains down by 65% from all-time highs. Investors remain nervous about trusting this once-exciting AI stock again. As a result, the stock is trading at a fairly low price-to-earnings multiple just below 14 -- down significantly from the premium investors were paying for it in the past. Data by YCharts. At such a reduced earnings multiple, it could have a lot of upside, and it arguably contains a good margin of safety should the business run into challenges, especially amid troublesome economic conditions, including tariffs and ongoing global trade wars. Is Supermicro stock worth buying today? Supermicro stands to benefit from an increase in demand for AI-powered products, and it now has data centers that use Nvidia's new Blackwell chips. If you're bullish on AI, this may be a good time to consider buying Supermicro stock. Its valuation has fallen significantly over the past year, and with much more growth still ahead, it can generate significant returns for investors who take a chance on the business today. There are still risks here, including a possible slowdown in AI spending if a recession takes place and companies reevaluate their investments in tech. But with accounting-related concerns seemingly out of the way and AI spending likely to remain high in the future, Supermicro looks like a stock that has the potential to double in value within the next five years, and it could make for a great buy right now.

Where Will Super Micro Computer Stock Be in 1 Year? | The Motley Fool

We're a quarter through 2025, and the generative artificial intelligence (AI) hype cycle may feel long in the tooth, but it is far from over. Companies continue to pour billions into the industry to avoid falling behind in a technology that could transform the global economy. This scramble for AI dominance lets hardware providers like Super Micro Computer (SMCI 10.46%) leverage a picks-and-shovels business model to provide the data-center equipment other companies need to build and deploy consumer-facing large language models (LLMs). But while business is booming, Supermicro's shares still trade at a dramatic discount to the all-time highs reached in 2024. Let's explore what the next 12 months might have in store for the company. At the time of writing, Supermicro shares have fallen more than 70% from their all-time high of $118.82, reached in March 2024. Much of the decline can be credited to a report from short-seller organization Hindenburg Research, which accused the company of accounting irregularities, self-dealing, and sanctions evasion in a scathing report published in August. After that, Supermicro experienced a whirlwind of bad news. The company delayed filing its 2024 annual report while its auditor, Ernst & Young, resigned, citing an unwillingness to be associated with its financial statements. This put the shares at risk of being delisted from the Nasdaq exchange, which could have hurt their liquidity and appeal to investors. However, things have begun getting better. In November, Supermicro appointed BDO USA as its new auditor and submitted a plan to regain compliance with the Nasdaq's listing rules. Most importantly, an internal review in December found no evidence of managerial misconduct. By February, the company submitted its delayed filings, putting it in compliance and allowing investors to finally focus on the business fundamentals. Most of Supermicro's regulatory challenges seem as if they've been resolved. However, they have distracted investors from the company's strong business momentum, which is belied by the huge stock price declines. The company's preliminary second-quarter earnings put this into perspective. Management forecast sales of $5.6 billion to $5.7 billion, which would represent a solid 54% year-over-year increase. This growth is powered by robust demand for its computer servers, which turn the graphics processing units (GPUs) made by partners like Nvidia and Advanced Micro Devices into ready-to-use computer servers for data-center clients. The company specializes in energy-efficient designs, which are ideal for companies trying to handle energy-intensive AI workloads. During the next 12 months, investors should expect Supermicro to benefit from the rollout of Nvidia's new Blackwell-based AI chips, which offer dramatic performance improvements compared to their predecessors. That said, while Supermicro benefits from Nvidia's innovation, it has significantly less pricing power, which has led to a gross margin of around 12% compared to Nvidia's gross margin of 75%. Like many technology companies, Supermicro has been hit hard by the announcement of Trump's "Liberation Day" tariffs, announced on April 2. The good news is that the levies on Taiwan aren't expected to apply to semiconductor chips, which are a significant part of Supermicro's supply chain because it uses them to make computer servers. Like most multinational companies, Supermicro has an extensive supply chain that will almost certainly be hit by at least some of Trump's new tariffs. The silver lining is that its foreign rivals will likely be hit harder. In February, the San Jose, California-based company announced plans to expand its U.S. manufacturing capacity with a new 300,000-square-foot facility, expected to reach nearly 3 million square feet when complete. This move could help it stay ahead of potential trade uncertainty and onshoring policies that may last long after the Trump administration. Even though Supermicro looks poised to outperform the market, this remains an incredibly uncertain time for stocks. And investors may want to wait for the dust to settle before taking any positions in Supermicro.