We recently published a list of Top 10 Stocks to Watch as Investors Brace for Potential Recession. In this article, we are going to take a look at where Super Micro Computer, Inc. (NASDAQ:SMCI) stands against other top stocks to watch as investors brace for potential recession.
President Donald Trump’s new reciprocal tariff announcement is hammering stock markets around the world as countries face a new reality and trade dynamics. The rising volatility has increased recession risks. Goldman Sachs recently said that it sees a 35% chance of a recession in the next 12 months, up from 20% previously. The bank also cut its 2025 GDP forecast to just 1% and raised its year-end unemployment rate outlook by 0.3 percentage points to 4.5%.
China and key European countries are beginning to respond to the latest tariffs and will likely impose retaliatory tariffs on US products, causing a further downturn in consumer sentiment. Kara Reynolds, an economist at American University, told ABC News that a pullback in spending from consumers and businesses due to these uncertainties can tip the US into a recession.
READ ALSO: 7 Best Stocks to Buy For Long-Term and 8 Cheap Jim Cramer Stocks to Invest In
For this article, we picked 10 stocks currently on Wall Street’s radar. With each stock, we have mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A team of technicians in a server room, testing and managing the newest server solutions.
Super Micro Computer, Inc. (NASDAQ:SMCI)
Number of Hedge Fund Investors: 33
Jeff Pierce from Charles Schwab said in a recent program on Schwab Network that Super Micro Computer, Inc. (NASDAQ:SMCI)’s SEC filing issues are now “behind” us and the company is inching towards growth. The analyst also mentioned a couple of bullish reports on the stock from notable Wall Street firms.
“I do think it is piling on to the acknowledgment that maybe some of the issues, especially around the SEC filings, are now behind us. We’re very far away from those 100-plus per share prices we saw this time last year, but they are inching up year to date. JPMorgan, as you pointed out, upgraded them to neutral from underweight, with a price target of 45, up from 35. They said the company has cycled past the uncertainty around those SEC filings and is on the cusp of benefiting from the ramp in Blackwell-based server shipments, which already show materially higher demand than prior generations. However, the firm did say they are raising their revenue forecast for the next 12 months, given the positive data points in recent weeks related to a better supply ramp from Nvidia. That balances the upcoming strong revenue progression with potential concerns about some of their margin trajectory, especially in a competitive landscape that’s been getting tighter. It’s similar to what we’ve seen from some other analysts. Last week, Rosenblatt reinstated their coverage of Super Micro Computer, Inc. (NASDAQ:SMCI) with a buy rating and a $60 price target. They seem to feel positive about the AI systems and gross margin upside. They also noted that there is still room for the company’s price-to-earnings multiple to move higher if they start to hit those revenue and gross margin targets.”
Overall, SMCI ranks 10th on our list of top stocks to watch as investors brace for potential recession. While we acknowledge the potential of SMCI, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than SMCI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
Hedge Fund Resource Center