2024-03-23 08:30:00 ET
Summary
- I was wrong previously about Supermicro, as I underestimated its near-term AI growth inflection.
- The company's success is closely tied to its partnership with AI chips leader Nvidia, and it has outperformed Nvidia in terms of total return.
- Supermicro's rapid go-to-market motion has allowed it to gain market share rapidly.
- I explain why SMCI is still not aggressively valued and has more upside potential.
- The recent pullback has offered investors a superb opportunity to gain more SMCI exposure.
I Was Wrong About Supermicro
To say that I was wrong about my cautious thesis on Super Micro Computer, Inc. ( SMCI ) in early December 2023 is an understatement. SMCI buyers tossed aside my Hold rating as the leading data center rack solutions provider provided a significant upgrade to its outlook at Supermicro's fiscal second-quarter earnings in late January 2024. As a result, I admit that I've completely misjudged Supermicro's near-term AI growth inflection. The company's marked guidance improvement also led to substantial target price upgrades by analysts post-earnings, as Wall Street turned strongly bullish on Supermicro's projections....
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Super Micro Computer: I Was So Wrong About This AI Compounder (Upgrade)