Super Micro Computer (SMCI-Q)

Earnings yesterday weren't bad. Stock's come down pretty aggressively today, and it's more a function that a stock that triples in 3 months and is priced to perfection is bound to come down. Likes the chip space. Too expensive, be careful. Watch for the next month, and if you miss it you miss it. Lots of other good companies to buy.

You don't want to be the one who buys super-high and then rides it all the way down. See his Top Picks.

One of the most hyped AI names, and AI is in a bubble. SMCI is a trade, not an investment. Buy Nvidia or AMD instead. You're playing with fire with SMCI.

Shares have tanked lately, because bond yields have been soaring as the market realizes that the Fed will cut rates later and perhaps less frequently. The March 8, non-farm payroll reports was lot hotter than expected, signaling a stronger employment market.

We would have preferred a positive pre-announcement over 'nothing' of course, but the lack of announcement in and of itself does not mean anything concrete. It may be bad news, or may not be. SMCI has lots of new shareholders from its issue, and lots of investors with huge embedded profits. In a panic sell off it can still be easy to sell a stock up 564% in the past year. Fundamentally wise, it would be very hard for SMCI to see a massively negative shift in revenue and earnings momentum in three months. But sentiment of course can shift much more quickly and dramatically. The move was likely hugely overdone, looking at its prospects. But as noted sentiment is more important in the short term, and the market is in a risk-off mood right now. 
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SMCI is inherently volatile and will be moreso as it approaches its earnings release on May 2 (estimated). It rose 10% on Tuesday and is up on the week (prior to Friday's open). Markets have been very weak in April and we would not necessarily attribute anything to the company itself. LOOP this week raised its target price to $1,500, and there has been no material company news. We have no reason to expect a weak quarter. To get to the prior high it needs to rise 30% or so, which we think is doable under the right conditions. A war in the Middle East would not help. We like its growth prospects and potential, but it is also a stock that could decline 30% or more if there is bad news. We are comfortable with it, but would size a position size to one's risk levels. 
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It is very difficult to perfectly trade a stock that swings $200 or 30% in a day. But we like the growth, the valuation, the financials and the industry. We would be comfortable buying. 
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SMCI guided higher again, even after doing so already very recently. It is riding a wave of spending, and remains cheap on most metrics and in comparison to peers. The party may not last forever, but it was a solid quarter with a solid outlook, and things look very good right now. The stock is up about 6% after market and is now up about 80% in 2024 alone. 
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Last year, it gained more than Nvidia, up 246%, and up 74% this year so far after it pre-announced much much better than expected sales on Jan. 18. Today, they released strong guidance for the next quarter and raised their full-year forecast substantially. Shares soared after hours today.

They raised guidance today, and shares jumped 3%, largely due to institutional buying. Tech analysis says shares built a base from September to this month till it caught up to its 200-day moving average. A great uptrend that saw shares break $300 recently with higher highs and higher lows. This could reach $487, based on data (last fall's pullback). Wait for a better entry point, not now.

SMCI is set to release earnings on January 30th but the company did release its updated guidance today for Q2. Net sales are expected to come in between $3.6B to $3.65B from what was previously expected at $2.7B to $2.9B. Adjusted EPS is expected to come in at $5.40 to $5.50, upped from the previous projection of $4.40 to $4.88. We continue to like SMCI and the upped guidance has added more fuel to a stock with already strong momentum. There is some concern than margins are being squeezed with higher demand, but the demand is clearly there. Even with today's move it is only 22X earnings. It has excess cash, strong cash flow and EPS could rise 70% this year. We like it a lot. 
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High-performance servers and storage solutions. Competes with Dell and HP, but is smaller, more nimble, and faster to market. Targets enterprise data centres, AI, 5G, cloud, and edge. Nice runway. Buy in thirds here, at $270, and $260.

Is driven by gen-AI popularity which will only continue.

Is second to Nvidia as the way to play AI and he's very bullish AI.