Stocks To Buy

Buy Super Micro Computer Stock? Still First Rate, Still Not Too Late.

Super Micro Computer (NASDAQ:SMCI) is bouncing back, but don’t assume a recovery is going to screech to a halt. Another big lift off may be just around the corner, thanks to an upcoming big event that stands to sway sentiment from “on the fence” back to fully bullish.

That’s not all. Additional factors could serve as secondary catalysts for shares in the months ahead. Despite mixed performance, SMCI can be purchased for under $1000 per share today, and the opportunity could soon slip away.

Super Micro Computer Stock: Prelude to Another Super Rally

Many factors have driven the recent rebound for SMCI stock. Investor sentiment has improved, thanks to Nvidia’s (NASDAQ:NVDA) recent reporting of strong quarterly results and updates to guidance.

These suggest that robust demand for Super Micro’s AI server products, some of which incorporate Nvidia’s AI chips, slowing down anytime soon.

Also, a spate of company-specific developments have helped to further extend this rally.

First, at the start of this month, the company announced it was collaborating on the construction of a large AI data center in Japan.

In a recent SMCI article, we discussed this development, plus another one regarding what represents a massive growth opportunity.

That would be Super Micro’s move into building “Direct Liquid Cooling” servers. These servers offer energy cost and environmental advantages over those that utilize traditional fan-based cooling systems.

To top it all off, there’s been another development that may be helping give SMCI a lift: the possible addition of the stock to the Nasdaq 100 index.

That’s not all. The recent run-up has been encouraging, yet it may just well be the prelude to an even more significant liftoff for shares in the coming months.

Next Stop $1,250-$1,500 Per Share? It’s Possible

In the weeks ahead, additional headlines may help to either keep Super Micro Computer stock elevated near current prices, or perhaps move it slightly higher, back toward the $1000 per share month.

However, the next big run-up for SMCI may not be too far away. In about seven weeks, Super Micro Computer is expected to release results for fiscal fourth quarter of 2024.

SMCI beat on earnings the last time, and given the aforementioned takeaways, it may be poised to report doing so again during the June quarter.

Not only that, Super Micro’s guidance updates for the upcoming fiscal year ending June 2025 could spark a strong renewal in bullishness among analysts and investors.

As you may recall, Super Micro raised guidance last quarter. If it does so again, helping to boost confidence that the company’s growth will meet or possibly beat current sell-side forecasts for next year, shares may be in for a serious rerating.

Right now, SMCI trades for 27.3 times estimated FY2025 earnings of $33.73 per share.

Even a modest rerating, to say 35-45 times forward earnings, would send this stock up to prices between $1,250 and $1,500 per share.

The Verdict: Not too Late, but the Clock’s Ticking

As a climb toward prices as much as 55.4% above current price levels is within reach, clearly it’s not too late to buy SMCI, if you’ve yet to do so. That said, while it’s not too late to enter a position, keep in mind that the clock’s ticking.

Over the next few months, further positive news may send Super Micro Computer shares back to four-figure prices, keeping them there. Instead of having its floor in the high $100s, $1,000 could become the new floor for SMCI.

The opportunity to accumulate a position at a more than reasonable price is slipping away.

Super Micro Computer stock is still one of the best names out there for exposure to the gen AI growth trend. Consider snapping it up, while shares remain at sub-$1000 prices.

Super Micro Computer earns an A rating in Portfolio Grader.

On the date of publication, Louis Navellier had long positions in SMCI and NVDA. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.

The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.

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