Super Micro Computer stock has potential to double due to growth in AI demand.

Super Micro Computer stock (NASDAQ: SMCI) has surged almost 10x in the past three years to $47 per share, driven by demand for server systems amid the AI wave. Despite a selloff due to governance concerns, the stock trades at 22x estimated FY’25 earnings. Revenue is projected to grow by 48% to $22 billion in FY’25, driven by tech companies boosting AI capacity. Super Micro’s competitive advantages, including customizability and energy efficiency, position it well for growth. Adjusted net margins could see improvement due to economies of scale and premium product mix, potentially reaching 12% by FY’28. Revenues growing 2.5x and margins improving 2x could lead to earnings growth of 5x, potentially driving the P/E multiple to 10x and the stock price over $100 per share. Despite past governance concerns, Super Micro’s growth potential remains strong.

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