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Key Points
Hardware maker Super Micro has successfully ridden the coattails of AI juggernauts Nvidia, Intel and AMD.
In November, the company raised its fiscal 2024 outlook to $10 billion to $11 billion in revenue.
Analysts expect year-over-year earnings and revenue growth when the company reports its second quarter in late January. 
5 stocks we like better than Super Micro Computer
Super Micro Computer Inc. NASDAQ: SMCI started 2024 with a bang, rallying 18.87% in the past week. 
The stock is in a buy zone, trading just below its January 10 high of $357.99.
The company’s business doesn’t sound glamorous: It makes high-efficiency server and storage systems for enterprise data centers, cloud computing, artificial intelligence, 5G and edge computing. The latter processes data close to the source to boost efficiency.
Benefiting from other companies’ success
There’s an old investing concept called “cousin stocks,” which refers to a company that benefits from another’s success. You don’t hear that term so much anymore, but the phenomenon is alive and well. 
Super Micro has been riding the coattails of AI leaders Intel Corp. NASDAQ: INTC, Nvidia Corp. NASDAQ: NVDA and Advanced Micro Devices NASDAQ: AMD because it works closely with all of them.That means Super Micro collaborates with these big chip makers to develop hardware designed to complement chip capabilities, rolled out to the market simultaneously. 
“Our collaborative approach with these vendors allows us to coordinate the design of our new products with their product release schedules, thereby enhancing our ability to rapidly introduce new products incorporating the latest technology,” the company said in a regulatory filing.
Products supporting Intel, Nvidia and AMD
For example, in the company’s fiscal 2023, which ended in June, Super Micro announced over 50 products supporting Intel’s new Sapphire Rapids data center central processing unit. It also released products to support AMD’s Genoa data center CPU, and workstations to support the new Nvidia H100 GPUs.
CEO Charles Liang cited ongoing supply constraints for graphics processing units when the company reported results for the first quarter of fiscal 2024 in November. 
“We are working diligently to meet these challenges, and given my confidence in my team and the strong demand we are seeing for AI infrastructure and compelling new and upcoming compute and storage products, we are now raising our fiscal year 2024 outlook to $10 billion to $11billion in revenue,” he said in the release statement.

Under analysts’ radar
Small is a relative term, but Super Micro doesn’t command the same attention from Wall Street analysts as its behemoth customers do. 
MarketBeat’s Super Micro Computer analyst forecasts show fairly sparse coverage versus those of the tech titans tracked in the Technology Select Sector SPDR Fund NYSEARCA: XLK.
Wall Street analysts frequently cover a stock if they believe there’s investment banking, lending or other business from a company. As a company grows, there’s a greater likelihood that analysts will jump on the bandwagon.
That, in turn, brings greater attention from institutional investors. As a bonus, analysts typically initiate coverage with a positive rating, which lures institutional investors. 
Steady increase in trading volume
Take a look at Super Micro’s chart. You can see a steady increase in trading volume since April 2022. The volume increase was even more pronounced than in larger stocks like Intel, Nvidia and AMD.
Super Micro stock took a hiatus starting in August and cleared a buy point above $357 on January 10. The stock pulled back in the following session but remains in a buy zone; investors may want to wait until it shows a day of upside trade before jumping in rather than chasing it lower. 
The company reports its fiscal second quarter on January 30, with analysts expecting earnings of $3.87 a share on revenue of $2.78 billion. Both would be year-over-year increases. The company is expected to grow earnings by 48% this year to $17.47 per share. Before you consider Super Micro Computer, you’ll want to hear this.MarketBeat keeps track of Wall Street’s top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on… and Super Micro Computer wasn’t on the list.View The Five Stocks Here Thinking about investing in Meta, Roblox, or Unity? Click the link to learn what streetwise investors need to know about the metaverse and public markets before making an investment.Get This Free Report

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