Investors are optimistic about Super Micro Computer, Inc. (SMCI) as shares have gained 97% this year, outperforming NVIDIA Corporation (NVDA). Following positive news, questions arise about SMCI’s potential to become the next NVIDIA and whether it’s a good investment.

Supermicro’s shares rose 10% after it was selected as the exclusive server supplier for Digi Power X’s ARMS 200 modular data center. Despite past challenges, Supermicro rebounded, cleared of fraud allegations, and secured a $20 billion deal with DataVolt in partnership with the Trump administration.

While Supermicro faced revenue growth delays in the March quarter due to NVIDIA’s chip shipments, expectations for the June quarter are higher. However, questions remain about SMCI’s ability to replicate NVIDIA’s success, given its smaller market share in the AI server industry.

Investors should approach SMCI cautiously despite recent gains. Competition from major tech vendors is pressuring margins, and the company’s financial health is at risk with a higher debt-to-equity ratio than the industry average. Trade uncertainties could also impact Supermicro’s growth.

Zacks Investment Research highlights the potential of SMCI and other stocks with strong buy ratings. With only 220 Zacks Rank #1 Strong Buys at any given time, these stocks have the potential to outperform the market. Download the Special Report for insights on these promising trades.

Read more at Nasdaq: Is SMCI Stock the Next NVIDIA, and Is It Worth Buying?