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May 4, 2024, 12:12 a.m.
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Super Micro Computer, a leading provider of accelerated computing platforms for enterprise and cloud-data centers, recently joined the S&P 500 index. The company specializes in developing storage and servers for applications like 5G and artificial intelligence (AI). With a unique approach to product development and partnerships with industry leaders like Nvidia, Supermicro is gaining market share in the AI server market. Despite a small setback in the third quarter, the company's financial results were still impressive, and it raised its full-year revenue outlook. Supermicro stock is reasonably valued compared to its expected earnings growth, making it an attractive investment option. While the company was not included in the Motley Fool Stock Advisor's list of top 10 stocks, its potential for growth in the AI market remains high. Investors comfortable with the risks should consider buying Super Micro Computer shares.

The S&P 500 is the most popular benchmark for the U. S. stock market, consisting of 500 large-cap companies worth at least $18 billion. Super Micro Computer recently joined the index, becoming the newest AI company in the S&P 500. The company has experienced significant growth, with its shares soaring over 1, 700% in the last two years due to strong demand for AI computing products. Wall Street analysts have a consensus rating of "buy" for Supermicro, with a median price target of $965 per share.

The company specializes in developing accelerated computing platforms for enterprise and cloud-data centers, with a focus on AI applications. Super Micro Computer is gaining market share in the AI server market and analysts project its sales to increase from 10% in 2023 to 17% in 2026. Although the company reported slightly lower-than-expected revenue in the third quarter, its non-GAAP net income exceeded analysts' forecasts. Supermicro expects to deliver higher revenue for the full year and is well-positioned to benefit from the forecasted 47% annual growth in the AI server market. The company's current valuation is considered reasonable compared to its anticipated earnings growth.


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