Nvidia has been a successful investment, but Wall Street believes that Super Micro Computer is a better stock to buy for artificial intelligence (AI). Super Micro Computer will replace Walgreens Boots Alliance in the Nasdaq-100 index, which tracks the 100 largest nonfinancial companies in the Nasdaq Composite. Supermicro's stock performance has been impressive, outpacing Nvidia with a 188% surge in the first half of 2024. Analysts predict that Supermicro's outperformance will continue, with a median price target of $1, 030 per share. Supermicro has a competitive advantage in the AI compute market due to its engineering prowess and unique approach to product development.
The company can bring new technologies to market faster than competitors and offers the broadest product portfolio in the industry. Supermicro also leads in liquid-cooled AI servers, which are expected to become more prevalent in data centers. Supermicro's stock is reasonably valued compared to Wall Street's earnings forecast, with strong growth expectations and a PEG ratio of 0. 78. In contrast, Nvidia's stock is considered more expensive with a PEG ratio of 1. 4.
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