Billionaires selling Nvidia and buying Super Micro Computer, expecting 215% increase in stock price

From Nasdaq.: 2024-09-07 04:00:00

During the second quarter, hedge fund billionaires Cliff Asness, Israel Englander, Ken Griffin, and David Shaw trimmed their positions in Nvidia while purchasing shares of Super Micro Computer. Analysts Nehal Chokshi and Hans Mosesmann set 12-month price targets of $1,300 per share for Supermicro, implying 215% upside from its current price of $413.

Nvidia dominates the AI chip market with a 90% share in data center GPUs. The company has expanded into subscription software and cloud services to monetize AI. In its fiscal 2025 second quarter, Nvidia reported a 122% increase in sales to $30 billion and a 152% rise in non-GAAP earnings to $0.68 per diluted share.

Super Micro Computer leads in AI server market with its internal manufacturing capabilities and fast product development. The company reported a 144% sales increase to $5.3 billion but experienced a decline in gross profit margins in its fiscal 2024 fourth quarter. Hindenburg Research alleged accounting red flags and customer issues, causing Supermicro shares to fall by 24%.

JPMorgan analyst Samik Chatterjee is not overly concerned about the allegations against Supermicro, maintaining a price target of $950 per share. Wall Street expects Supermicro to grow earnings by 46% annually over the next three years, with a current valuation of 21 times earnings. Patient investors may find the current price a reasonable entry point with potential for market outperformance in the future.



Read more at Nasdaq.: Billionaires Are Selling Nvidia Stock and Buying 1 AI Stock That Could Soar 215%, According to Certain Wall Street Analysts