Should you buy SMCI stock? (January 2024)

Published first at https://www.3minutebreakdowns.com Super Micro Company stock analysis. Ticker: $SMCI Super Micro Computer made a surprise announcement last week, raising its revenue guidance by 30%. The company initially thought revenue would increase 50% in the second quarter to 2.8 billion. It now expects revenue of 3.6 billion which is an increase of 100%. Unsurprisingly, this news sent the stock soaring and now the company has a market valuation of 26.2 billion dollars. Super Micro sells hardware systems that are used to build data servers and storage systems. Demand for Nvidia’s GPU systems has been the primary growth driver for SMCI over the last couple of quarters as customers race to build out their platforms for generative AI. Trailing twelve month revenue comes to 7.4 billion with net income of 600 million. But those figures don’t incorporate the latest guidance. Account for guidance and next year revenue could easily hit 15 billion with net income potentially coming in at 1.2 billion. So Super Micro stock is more realistically valued at around 22 times next year's earnings. Compared to many growth stocks that may sound cheap but for a hardware company it isn’t particularly attractive. Cisco, for example, trades at 16 times earnings and Hewlett Packard around 10 times earnings. #investing #stocks #stockstobuy #smcistock