Mikhail Sheleh
- Super Micro Computer experienced significant volatility, surging to $1,230/share and plummeting to $480/share pre-split.
- Worse-than-expected Q4 FY24 earnings and the Hindenburg short-seller report weighed on the stock, but that may change.
- SMCI’s position in the AI sector and partnerships with Nvidia and AMD present a compelling long-term opportunity.
- SMCI’s expected strong revenue and EPS growth, driven by increased CAPEX spending, suggests potential for substantial returns, with analysts forecasting a 42% upside over the next 12 months.
- Valuation is no issue, and if SMCI achieves projected earnings and is repriced between 20-30x P/E, there is potential for 51% annualized returns over the next few years.
In Q1 2024, Super Micro Computer (NASDAQ:SMCI) (NEOE:SMCI:CA) was certainly one of the red-hot stocks, driven by the AI-investment narrative, which pushed the stock to its all-time high of $1,230/share by the end of March, compared to $300/share at the beginning of the year.
Following a 10-for-1 stock split in October, in my first coverage of the company on Seeking Alpha, I’ll further refer to SMCI shares using the split-adjusted price.
However, as we learned from the past, good things have to come to an end, and SMCI is no exception. The stock took a nosedive to $45/share, down roughly 63% below its all-time high.
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