Share of the week to date super microcomputer (NASDAQ:SMCI) It rose 23% through Thursday's market close, according to data provided by S&P Global Market Intelligence. Demand for artificial intelligence (AI)-driven computing is accelerating revenue growth and profits at this leading supplier of rack-scale solutions for data centers.
Despite a huge jump in stock prices last year, the company has seen its products gain market share and raised its full-year earnings outlook.
Why super microcomputer sales increased over 100% in the second quarter
In the company's fiscal year 2023 annual report, CEO Charles Liang said the ongoing growth in AI computing will have a greater impact on the world than the industrial revolution more than 200 years ago. He said that there is a possibility of giving. His company is certainly growing that way. Supermicro earlier this week reported record sales of $3.66 billion for its fiscal second quarter, which ended Dec. 31, an increase of 103% from the same period last year.
The company continues to benefit from demand for: Nvidiagraphics processing units (GPUs) are driving sales growth for Super Micro's rack systems for AI as the supply of these chips improves.
Management expects fiscal year 2024 sales to double to between $14.3 billion and $14.7 billion. “With the boom in AI applications, we expect our annual sales target of $20 billion to be achieved within the next few years.” ,” Liang said in his annual letter to shareholders last year.
Why do stock prices have room to rise?
Despite soaring 700% in the past 12 months, the stock remains reasonably priced. The company reported adjusted earnings per share of $5.59, up from $3.26 in the year-ago period. This gives him an annual run rate of $22.36 and a forward price-to-earnings ratio of 25.9.
Considering that fair evaluation, there is a high possibility that Supermicro's management is not over yet.
Should you invest $1,000 in a super micro computer right now?
Before buying Super Micro Computer stock, consider the following:
of Motley Fool Stock Advisor Our analyst team has identified what they believe Best 10 stocks Things investors could buy right now…and super micro computers weren't among them. These 10 stocks have the potential to generate impressive returns over the next few years.
stock advisor provides investors with an easy-to-understand blueprint for success, including guidance on portfolio construction, regular updates from analysts, and two new stocks each month.of stock advisor Since 2002, the service has more than tripled S&P 500 returns*.
See 10 stocks
*Stock Advisor will return as of January 29, 2024
John Ballard has a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool recommends Super Micro Computers. The Motley Fool has a disclosure policy.
Why supermicrocomputer stocks soared to new highs this week Originally published by The Motley Fool
