2024-03-21 19:14:59 ET
Summary
- Super Micro Computer's share price has skyrocketed by 230% in the past year.
- The company's financials show a decrease in margins and profitability, in favor of market share gains.
- The company's future growth is uncertain, and its current share price may be overvalued. I am downgrading it to a Hold for now.
Introduction
I wanted to revisit Super Micro Computer, Inc. ( SMCI ) to see how it has performed over the last year. Since my first Buy article on the company was published just half a year ago, the share price skyrocketed and is sitting at around 230% gain against S&P500's ( SPY ) 17%, so if you got in when I recommended, congratulations on fat gains! In the article, I argued that the company is going to perform very well in terms of capturing the AI hype of the server segment, incorporating the top AI players like NVIDIA Corporation ( NVDA ) and Advanced Micro Devices, Inc. ( AMD ). I expected decent revenue growth going forward, but I didn't expect it to explode into triple digits! So, I was right about the potential of the company but not to the extent it performed since....
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For further details see:
Super Micro Computer: Revenue Surges, Margin Pressures, And Why I Am Downgrading