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Super Micro Computer (SMCI) Experienced an AI-Driven Uptick in Demand

Artisan Partners, an investment management company, released its “Artisan Small Cap Fund” first quarter 2024 investor letter. A copy of the letter can be downloaded here. Equity markets surged at the beginning of 2024 in anticipation of the US economy entering a “goldilocks” scenario – a soft landing combined with decreasing inflation, potentially leading to a cut in interest rates by the Fed. In the first quarter, its Investor Class fund ARTSX returned 9.43%, Advisor Class fund APDSX posted a return of 9.42%, and Institutional Class fund APHSX returned 9.48%, compared to a return of 7.58% for the Russell 2000 Growth Index. In addition, please check the fund’s top five holdings to know its best picks in 2024.

Artisan Small Cap Fund highlighted stocks like Super Micro Computer, Inc. (NASDAQ:SMCI), in the first quarter 2024 investor letter. Super Micro Computer, Inc. (NASDAQ:SMCI) develops and manufactures high-performance server and storage solutions. The one-month return of Super Micro Computer, Inc. (NASDAQ:SMCI) was 18.48%, and its shares gained 290.59% of their value over the last 52 weeks. On May 28, 2024, Super Micro Computer, Inc. (NASDAQ:SMCI) stock closed at $874.72 per share with a market capitalization of $51.221 billion.

Artisan Small Cap Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its first quarter 2024 investor letter:

“Extremely strong returns by two sector constituents, Super Micro Computer, Inc. (NASDAQ:SMCI) and MicroStrategy, contributed 393bps (52%) to the index’s return and gave them the largest combined weighting in the index’s history. Super Micro Computer started the year with a 1.1% index weighting and a market value of $15.9 billion, and it ended the quarter at 3.8% and $56.5 billion. The company manufactures server racks for central processing units and GPUs that have experienced an AI-driven uptick in demand from its cloud and enterprise customers. This company has been on our radar for years, and we met with them in our Milwaukee offices in early 2023. However, we don’t consider the stock investable given corporate governance issues, including a lack of board independence, misaligned compensation arrangements, accounting misstatements (including a settlement) and related party transactions.”

A team of technicians in a server room, testing and managing the newest server solutions.

Super Micro Computer, Inc. (NASDAQ:SMCI) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held Super Micro Computer, Inc. (NASDAQ:SMCI) at the end of the first quarter which was 40 in the previous quarter.

Super Micro Computer, Inc. (NASDAQ:SMCI) experienced another solid quarter with revenue of $3.85 billion, up 200% from the same quarter the previous year. The robust performance was driven by the ongoing demand for rack-scale plug-and-play total AI solutions.

In another article, we discussed Super Micro Computer, Inc. (NASDAQ:SMCI) and shared the list of unstoppable AI stocks to buy. Polen U.S. Small Company Growth Strategy commented about Super Micro Computer, Inc. (NASDAQ:SMCI) in the first quarter 2024 investor letter. In addition, please check out our hedge fund investor letters Q1 2024 page for more investor letters from hedge funds and other leading investors.

If you are looking for an AI stock that is as promising as Microsoft but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

READ NEXT: Michael Burry Is Selling These Stocks and A New Dawn Is Coming to US Stocks.

Disclosure: None. This article is originally published at Insider Monkey.

The $250 Trillion AI Hype is Real. A few years from now, you’ll probably wish you’d bought this stock.

When Jeff Bezos said that one breakthrough technology would shape Amazon’s destiny, even Wall Street’s biggest analysts were caught off guard.

Fast forward a year and Amazon’s new CEO Andy Jassy described generative AI as a “once-in-a-lifetime” technology that is already being used across Amazon to reinvent customer experiences.

At the 8th Future Investment Initiative conference, Elon Musk predicted that by 2040 there would be at least 10 billion humanoid robots, with each priced between $20,000 and $25,000.

Do the math. According to Musk, this technology could be worth $250 trillion by 2040.

Put another way, that’s roughly equal to:

  • 175 Teslas
  • 107 Amazons
  • 140 Metas
  • 84 Googles
  • 65 Microsofts
  • And 55 Nvidias

And here’s the wild part — this $250 trillion wave isn’t tied to one company, but to an entire ecosystem of AI innovators set to reshape the global economy.

It’s a leap so massive, it could reshape how businesses, governments, and consumers operate worldwide.

Even if that $250 trillion figure sounds ambitious, major firms like PwC and McKinsey still see AI unlocking multi-trillion-dollar potential.

How could anything be worth that much?

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  • Bill Gates sees artificial intelligence as the “biggest technological advance in my lifetime,” more transformative than the internet or personal computer, capable of improving healthcare, education, and addressing climate change.
  • Larry Ellison — through Oracle, is spending billions on Nvidia chips and partnering with Cohere to embed generative AI across Oracle’s cloud and apps.
  • Warren Buffett — not known for tech hype — says this breakthrough could have a ‘hugely beneficial social impact.

When billionaires from Silicon Valley to Wall Street line up behind the same idea — you know it’s worth paying attention to.

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