Can SMCI Hit $1,200 Again?
Cheap at Any Price
Super Micro reported sterling financial results. Revenue tripled to $3.85 billion while earnings increased 400% to $6.65 per share.
It also raised its full-year revenue guidance to between $14.7 billion and $15.1 billion, well ahead of analyst expectations for $14.6 billion. But because Wall Street had also forecast the chipmaker would bring in $3.95 billion in sales, the market beat down SMCI shares.
What it seems to show is the market remains concerned about valuations. As bright as Super Micro’s future is, the stock was richly valued. Today, though, after losing 35% of its value from its all-time high, shares are attractively priced.
SMCI stock goes for 45 times trailing earnings and 4x sales, typically expensive valuations, but the chipmaker also trades at a much more reasonable 23 times next year’s earnings estimates. Analysts predict Super Micro’s profits will grow at a staggering 62% annually for the next five years, yet shares trade below that rate.
Super Micro reported sterling financial results. Revenue tripled to $3.85 billion while earnings increased 400% to $6.65 per share.
It also raised its full-year revenue guidance to between $14.7 billion and $15.1 billion, well ahead of analyst expectations for $14.6 billion. But because Wall Street had also forecast the chipmaker would bring in $3.95 billion in sales, the market beat down SMCI shares.
What it seems to show is the market remains concerned about valuations. As bright as Super Micro’s future is, the stock was richly valued. Today, though, after losing 35% of its value from its all-time high, shares are attractively priced.
SMCI stock goes for 45 times trailing earnings and 4x sales, typically expensive valuations, but the chipmaker also trades at a much more reasonable 23 times next year’s earnings estimates. Analysts predict Super Micro’s profits will grow at a staggering 62% annually for the next five years, yet shares trade below that rate.
Its price-to-earnings growth rate is just 0.72. Anything below 1 is considered cheap. And for a fast-growing industry behemoth like Super Micro Computer, this price is a steal.
AI-Powered Market Share Gains
The company is the premier provider of artificial intelligence (AI)-optimized computers, servers, networks, storage solutions and workstations for data centers and other industries.
Data centers, in particular, are a huge growth market at the moment. Hyperscalers like $Amazon(AMZN.US$ , $Alphabet-A(GOOGL.US$ , $Microsoft(MSFT.US$ and $Meta Platforms(META.US$ demand more infrastructure to handle the complex computational requirements of AI.
Amazon is one of the largest data center operators for its cloud services business, with 125 sites around the world. Microsoft operates 300 physical data centers in 64 regions globally.
McKinsey & Company estimates U.S. data center demand will grow 10% annually through 2030 with construction hitting $49 billion. But because the hyperscale market is forecast to grow 20% a year, McKinsey’s outlook may be conservative.
The company is the premier provider of artificial intelligence (AI)-optimized computers, servers, networks, storage solutions and workstations for data centers and other industries.
Data centers, in particular, are a huge growth market at the moment. Hyperscalers like $Amazon(AMZN.US$ , $Alphabet-A(GOOGL.US$ , $Microsoft(MSFT.US$ and $Meta Platforms(META.US$ demand more infrastructure to handle the complex computational requirements of AI.
Amazon is one of the largest data center operators for its cloud services business, with 125 sites around the world. Microsoft operates 300 physical data centers in 64 regions globally.
McKinsey & Company estimates U.S. data center demand will grow 10% annually through 2030 with construction hitting $49 billion. But because the hyperscale market is forecast to grow 20% a year, McKinsey’s outlook may be conservative.
Depending upon who’s counting, Super Micro Computer has between 5% and 7% of the branded server market, far behind leaders $Dell Technologies(DELL.US$ and $Hewlett Packard Enterprise(HPE.US$ with 19% and 13% shares, respectively.
Yet SMCI is witnessing tremendous growth from AI graphics processing unit platforms. Over 50% of the $3.85 billion in revenue it generated in its fiscal third quarter came from AI GPU customers. Dell and Hewlett-Packard report much lower percentages of server revenue coming from AI systems.
Yet SMCI is witnessing tremendous growth from AI graphics processing unit platforms. Over 50% of the $3.85 billion in revenue it generated in its fiscal third quarter came from AI GPU customers. Dell and Hewlett-Packard report much lower percentages of server revenue coming from AI systems.
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118407 : wait for 700
118407 : pls continue down, many people is waiting for your discount price