SMCI - Super Micro Computer: 385% Boost In CapEx To Maintain Above-Trend Growth
2024-06-27 12:54:43 ET
Summary
- SMCI is a key player in the server systems market, with over 90% of revenue coming from server and storage systems.
- The AI server market is booming, with a CAGR of 30.3% expected in the coming years, significantly benefiting SMCI's revenue growth.
- The company is gaining market share and experiencing over 100% revenue growth momentum, with a focus on growth over margins to maintain market share in a competitive industry.
- The management has tripled capex over the past 9 months on a YoY basis to sustain strong growth potential, despite potential impacts on its FCF.
- The stock appears attractive due to its historical valuation multiples not being directly comparable, as previous metrics did not account for the substantial growth potential from the GenAI boom.