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.
Investment Thesis
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