Super Micro Computer (SMCI)- Rating this a Strong Buy at <=$60/sh

 Summary:

  • I opened an initial position with SMCI as of Thursday, Feb 20, 2025, ahead of its FY2024 10-K and FY2025 10-Q filing deadline on Feb 25, 2025.  I rate the stock a strong buy at <=$60/share. 
  • No accounting discrepancies or evidence of fraud have been found since the late accounting reports, which is a positive, making this purchase a potentially high risk/high reward investment.  
  • SMCI appears at a much better valuation compared to one year ago when its stock price was $120/share.  It fell as low as $20 in Aug 2024 before beginning a volatile return back to the $50s.  
  • SMCI's direct cooling technology will be continuing to be adopted by major players in the AI spectrum.  
  • SMCI projects FY2025 will be somewhat muted, likely due to fallout over the late 10-K reports. However, the company projects that FY2026 will be a big year with $40 billion in revenue supported by their partnership with NVIDIA and its Blackwell products.  
  • Short interest is at ~13% and I think more and more short covering is in store, especially if NVIDIA has a strong earnings report delivered on Feb 26, 2025.  Short covering would help with volatile moves upward in the stock price.

 February 20, 2025 stock chart for SMCI:

SMCI carries a high degree of risk, but potential for solid price appreciation. 
 

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