We recently published a list of Top 10 Trending AI Stocks to Watch. Since Super Micro Computer, Inc. (NASDAQ:SMCI) ranks 8th on the list, it deserves a deeper look.
Wall Street continues to gain momentum amid the latest earnings season and analysts are wondering whether we are still up for soft landing. Mohamed El-Erian, Allianz chief economic advisor, talked about the possibility of a soft landing vs no landing during a program on CNBC. When asked what would it take for the market to have a no-landing scenario, the analyst said:
“I think we need the productivity enhancers from A.I., from life sciences to come earlier, we need to continue to have positive shocks to our labor force. And if we get those two things, you can get the bigger but not hotter economy which actually would be perfect for almost everything you can think of, from households to companies to financial markets.”
The analyst does not rule out the possibility of a recession, however.
“My probability of a soft landing is 55%, and a recession is 30%. A soft landing is the most likely scenario, but it’s not dominant. Why isn’t it dominant? Because we have weakness in the household sector, particularly on the lower-income side, and the Fed has been unpredictable. Just think, Morgan—at the end of July, the Fed didn’t cut rates because everything seemed fine. By the next meeting in mid-September, it cut 50 basis points. And now it’s talking about cautious cuts. So, the Fed needs to be careful.”
For this article we picked 10 trending AI stocks based on latest news. With each company we have mentioned its hedge fund sentiment. 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 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Super Micro Computer Inc (NASDAQ:SMCI)
Number of Hedge Fund Investors: 47
Super Micro Computer Inc (NASDAQ:SMCI) recently launched a new 3U Edge AI server, designed to accommodate up to 18 GPUs and equipped with Dual Intel (NASDAQ) Xeon 6900 series processors featuring P-cores.
“As the AI market is growing exponentially, customers need a powerful, versatile solution to inference data to run LLM-based applications on-premises, close to where the data is generated,” stated Supermicro CEO Charles Liang. “Our new 3U Edge AI system enables them to run innovative solutions with minimal latency.”
The new SYS-322GB-NR model incorporates two Intel Xeon 6900 processors with P-cores, 8800 MT/s MRDIMM, and offers up to 20 PCIe 5.0 expansion slots. It supports both single and double-width GPUs or allows for the use of some expansion slots for high-performance I/O or other add-on cards. Additionally, the server can accommodate up to 6TB of RDIMM memory and up to 14 E1.S or 6 U.2 NVMe drives.
This launch follows news that Super Micro Computer Inc (NASDAQ:SMCI) had recently deployed over 100,000 GPUs using its liquid cooling solution system for major AI factories and other cloud service providers.
Carillon Scout Mid Cap Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its Q2 2024 investor letter:
“Super Micro Computer, Inc. (NASDAQ:SMCI) was the top detractor to returns in the second quarter. Super Micro designs and manufacturers server solutions based on modular and open-standard architecture. This modular approach combined with a strong engineering culture helps the company to supply the market with advanced servers and rack-scale compute solutions quickly. After an impressive return in the first quarter, the company offered disappointing near-term earnings guidance, though we do not believe its long-term opportunity has diminished. We expect continued strong growth for several years, although the range of outcomes is quite wide; it is difficult to forecast AI server market growth with precision.”
Overall, Super Micro Computer, Inc. (NASDAQ:SMCI) ranks 8th on Insider Monkey’s list titled Top 10 Trending AI Stocks to Watch. While we acknowledge the potential of Super Micro Computer, Inc. (NASDAQ:SMCI), our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. 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.
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Disclosure: None. This article is originally published at Insider Monkey.
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