Super Micro Computer has had an outstanding performance this year, with its stock soaring 196.6% so far in 2024. This impressive growth can be attributed to the growing demand for servers and storage systems driven by artificial intelligence (AI). Super Micro’s success has also been closely tied to that of Nvidia, a company that has seen its stock price rise by 154.9% this year.
Despite Super Micro’s stellar performance, it is not the top-performing stock in the S&P 500. There is another tech stock, super microcomputer, that has outperformed both Nvidia and Super Micro with a gain of 318% year-to-date as of mid-March. While Super Micro’s stock has had a fantastic decade, with its market capitalization now exceeding $49.3 billion, there are some concerns about its share price being diluted due to a recent public offering of 2 million shares.
Looking ahead, the rise of AI and the strong demand for servers and storage systems bodes well for both Nvidia and Super Micro. However, cautious investors may want to consider other options, as valuation could become an issue if demand for AI systems slows down. Despite this, Super Micro’s future earnings multiple is still reasonable at around 26, making it a potentially attractive pick for aggressive investors with a long-term outlook.
Overall, Super Micro Computer’s strong performance this year can be attributed to the growing demand for AI-driven solutions, as well as its close relationship with Nvidia. While there are some concerns about valuation and potential share dilution, the company’s growth prospects and position in the market make it a compelling choice for investors looking to capitalize on the tech sector’s continued growth.
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https://www.fool.com/investing/2024/06/26/meet-the-1-sp-500-stock-thats-outperforming-nvidia/
