Super Micro Computer Outperforms Nvidia as AI Stock

Underdog surpasses Titan: Super micro computer's stellar performance trumps Nvidia in AI stocks race

Super Micro Computer is officially one of the most popular artificial intelligence stocks on Wall Street. Over the last year, shares of California-based Super Micro Computer have risen by 585%, more than doubling Nvidia's stock price performance of 210%. Super Micro Computer is up 81% year to date, more than tripling Nvidia's 27% increase during the same period.

Super Micro Computer's stock price has risen from a little under US$5 billion at the beginning of 2023 to US$27.5 billion now. To put both firms' sizes into perspective, Nvidia's market valuation has increased by more than US$1 trillion during the same period.

Super Micro Computer sells high-performance AI-enabled servers to data centers and organizations, and its business has grown significantly in the last year as generative AI technologies such as ChatGPT and Midjourney become more widely adopted.

Super Micro Computer revealed second-quarter financial statistics on Monday that stunned Wall Street. Super Micro Computer said its second-quarter revenue doubled year on year to US$3.7 billion, and it boosted its full-year revenue outlook to at least US$14.3 billion, much exceeding analyst expectations of US$11.5 billion.

"While we continue to gain new partners, our current end clients continue to want more of Supermicro's optimized AI computer platforms and rack-scale Total IT Solutions", Super Micro Computer CEO Charles Liang stated in the company's earnings announcement.

The results stunned Wall Street, prompting Wedbush analyst Matt Bryson to more than quadruple his price objective for the stock to US$530 from US$250. Meanwhile, Susquehanna analyst Mehdi Hosseini wrote in a note that Super Micro Computer's findings show that AI is still in the early innings of adoption.