Super Micro Computer is expected to outperform Nvidia in the AI market

From Nasdaq: 2024-06-23 14:15:00

Super Micro Computer (NASDAQ: SMCI) and Nvidia (NASDAQ: NVDA) are top AI stocks. Supermicro produces dedicated AI servers, while Nvidia is the leading producer of data center GPUs for AI tasks. Supermicro’s stock surged 246% in 2023 and 223% in 2024, outperforming Nvidia’s 239% and 164% rise, respectively.

Supermicro’s revenue and earnings grew 37% and 115% in fiscal 2023, with expected growth of 110% and 102% in fiscal 2024. Nvidia’s fiscal 2023 revenue growth was flat as adjusted earnings dropped 25%, but fiscal 2025 is expected to see 98% and 108% growth, respectively. Supermicro is projected to grow faster over the next three years.

Supermicro has more room to grow than Nvidia. It controls only 10% of the dedicated AI server market with expected growth to 17% over the next three years. The partnership with AMD for dedicated AI servers could reduce its reliance on Nvidia. Supermicro’s stock is cheaper at 25 times forward earnings and 2 times fiscal 2025 sales, compared to Nvidia’s 50 times forward earnings and 30 times sales.

Super Micro Computer is still a smart investment for long-term growth despite the recent surge in its stock price. It is expected to continue outperforming Nvidia, making it a favorable choice for growth-oriented investors. Both companies target different segments of the AI market, making them excellent long-term plays for investors looking to diversify their portfolios.



Read more at Nasdaq: 3 Reasons Super Micro Computer Could Outperform Nvidia This Year