Super Micro Surges on AI and Cloud Leadership Despite Lofty Valuation
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I was wrong about my cautious thesis on Super Micro Computer (SMCI) in early December. SMCI has seen tremendous growth due to AI and partnerships with companies like Nvidia.
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SMCI is intertwined with AI leader Nvidia but has outperformed NVDA significantly over the past year. SMCI is establishing leadership in providing AI solutions.
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SMCI has concentrated revenue from cloud service providers but is positioned to expand to other enterprise verticals like 5G and IoT.
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Valuation is higher than peers but SMCI has raised significant funding to maintain leadership in AI racks. More powerful AI models could drive further growth.
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SMCI seems poised to maintain leadership but competition remains in enterprise space. Recent pullback offers chance to gain more exposure in a company that may have further to run.