Super Micro Computer Inc SMCI has established itself as a standout choice in the artificial intelligence (AI) hardware segment, leaving industry giant NVIDIA Corp NVDA in the shadows, as highlighted by veteran investor Louis Navellier.
Navellier’s Enthusiasm: Navellier, the seasoned founder and chairman of Navellier & Associates, has held a long-standing position as an investor in Super Micro Computer. In a recent appearance on CNBC’s “Street Signs Asia,” Navellier expressed his excitement over the remarkable performance of the company, emphasizing that Super Micro Computer is presently outperforming Nvidia in the AI hardware marketplace.
“Super Micro is hotter than Nvidia. And the reason they’re hotter is they beat their guidance. And it’s not in the S&P 500 right now. They’ll probably be added,” Navellier articulated.
Super Micro Computer, a notable Nasdaq-listed entity specializing in AI systems and graphics processing unit servers, has witnessed a staggering surge in its share value by over 200% this year, surpassing Nvidia’s 59% increase.
Market Sentiment: Navellier advises that investors eyeing the AI trend should explore hardware stocks, with Super Micro Computer and Nvidia reigning as the dominant players. He also shares the belief that Super Micro Computer’s stock holds value without being overpriced, a sentiment supported by Wall Street analysts.
Bank of America’s Perspective: Bank of America recently underscored Super Micro Computer’s untapped potential in mid-February, highlighting its increasing backlog and expanding capacity. The company has set a price target of $1,040, signifying a 21% upside, accompanied by a buy rating. According to FactSet data, analysts covering Super Micro Computer have issued a 71% buy recommendation for the stock.
Significance: Navellier’s validation of Super Micro Computer emerges at a key juncture when the AI hardware market is undergoing notable transformations. Nvidia’s recent identification of Huawei Technologies as a formidable competitor in the AI chip domain right before Navellier’s remarks spotlighted the evolving landscape. This acknowledgment of Huawei’s ascending influence in AI hardware, despite ongoing chip constraints, highlights the sector’s dynamic nature.
Navellier’s assessment of Super Micro Computer also stands in contrast to warnings from other industry figures regarding the sustainability of the current market upsurge. John Hussman, President of the Hussman Investment Trust, has cautioned that the market’s “fear of missing out” rally could lead to an extended period of diminished returns, casting doubt on the long-term potential of the AI-driven market surge.
Amid scrutiny within the tech sector over potential overvaluation, particularly in the AI and hardware domains, Navellier’s confidence in Super Micro Computer suggests that solid investment prospects may still exist. Despite concerns regarding a looming market bubble reminiscent of the dot-com era, Navellier’s resolute backing of Super Micro Computer hints at continued promising opportunities within the tech sector.
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