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Why Is Navellier & Associates Bullish on Super Micro Computer, Inc. (SMCI) Now?

We recently compiled a list of the 10 Best Stocks to Buy According to Navellier & Associates. In this article, we are going to take a look at where Super Micro Computer, Inc. (NASDAQ:SMCI) stands against the other stocks approved by Navellier & Associates.

Founded in 1987 by growth analyst Louis Navellier, Navellier & Associates is an independent firm based in Reno, Nevada. Navellier & Associates specializes in identifying market inefficiencies to find top-growth stocks through a disciplined quantitative and fundamental analysis system. With over 30 years of experience, they offer customized portfolio strategies for individual investors to maximize returns while managing risk. Unlike competitors who mimic indexes, Navellier aims to outperform them, resulting in low correlation with benchmarks and increased diversification.

Louis Navellier is the Founder, Chairman of the Board, Chief Investment Officer, and Chief Compliance Officer of Navellier & Associates, Inc. With decades of experience applying academic techniques to real market scenarios, he advocates for disciplined quantitative analysis to identify stocks that can outperform the market. His approach involves a rigorous three-step process: quantitative analysis, fundamental analysis, and optimization of selected securities for portfolio inclusion. This approach has been used by the firm where they employ a highly disciplined, bottom-up stock-selection process for most portfolios. First, they screen market and stock statistics to measure reward (alpha) and risk (standard deviation), selecting stocks in the top percentiles. Next, they further screen the top-ranked stocks for high-profit margins, strong earnings growth, and reasonable price/earnings ratios based on future earnings. Finally, a proprietary optimization model maximizes portfolio alpha while minimizing standard deviation, creating well-diversified portfolios across various sectors and industries.

Since 1980, he has shared his insights through the MPT Review, a stock advisory newsletter. Since 1987, he has actively managed individual portfolios, mutual funds, and institutional portfolios. Known for his charismatic leadership, Louis Navellier has been featured extensively in international media, including CNBC, Bloomberg, The Nightly Business Report, and Wall Street Week. His insights have also been highlighted in Barron’s, Forbes, Fortune, Investor’s Business Daily, Money, Smart Money, and The Wall Street Journal. He has been profiled in books such as Kenneth A. Stern’s “Secrets of the Investment All-Stars” and Alan R. Ackerman’s “Investing Under Fire.” Mr. Navellier earned his B.S. in business administration in 1978 and his M.B.A. in finance in 1979 from California State University – Hayward.

Navellier & Associates is a well-known advisory firm with 1,314 clients and manages assets worth $743,578,818, as reported in their Form ADV from March 2024. Their Q1 2024 filing shows they handle $811,568,534 in securities, with the top 10 holdings making up 29.01% of the total.

Our Methodology

This article covers Navellier & Associates’ top 10 stock picks for the first quarter of 2024. We’ve included analyst ratings and key details about these companies, along with the number of hedge funds investing in each. Why focus on hedge fund investments? Our research indicates that copying the top picks of leading hedge funds can result in better-than-market returns. Our quarterly newsletter’s strategy, which chooses 14 small-cap and large-cap stocks each quarter, has achieved a 275% return since May 2014, outperforming the benchmark by 150 percentage points. (see more details here).

A close-up of a colorful high-end graphics card being plugged in to a gaming computer.

Super Micro Computer, Inc. (NASDAQ:SMCI)

Navellier & Associates’ Stake Value: $42,017,248

Number of Hedge Fund Holders: 35

Securing the 2nd spot in Navellier & Associates’ top 10 stock picks is Super Micro Computer, Inc. (NASDAQ:SMCI). Super Micro Computer, Inc. (NASDAQ:SMCI) specializes in high-performance computing solutions, which are increasingly in demand due to the growth of data centers, cloud computing, and AI. Super Micro Computer, Inc. (NASDAQ:SMCI) is recognized for its innovative products, including servers and storage systems. Recently, Super Micro Computer, Inc. (NASDAQ:SMCI) reported a 46% increase in revenue and a 65% rise in EPS over the past year. This strong revenue growth is largely driven by the rising need for AI and data center solutions.

Analyst Mike Zaccardi has a hold rating on Super Micro Computer, Inc. (NASDAQ:SMCI). After a strong start to 2024, Super Micro Computer, Inc. (NASDAQ:SMCI) has stabilized and is now near a fair price. Given the potential for seasonal downturns and a neutral chart, he expects the stock to remain at its current levels for the next few months. Super Micro Computer, Inc. (NASDAQ:SMCI) is expected to report an earnings per share (EPS) of $3.87 for fiscal year 2024, up significantly from $2.46 the previous year. By the end of the first quarter of 2024, Navellier & Associates held 41,600 shares of Super Micro Computer, Inc. (NASDAQ:SMCI), valued at $42,017,248. This investment made up 5.17% of their total portfolio, according to regulatory filings.

The Brown Capital Management Small Company Fund stated the following regarding Super Micro Computer, Inc. (NASDAQ:SMCI) in its first quarter 2024 investor letter:

“We are benchmark-agnostic, so we spend our time researching current or potential EGCs, not analyzing indexes. However, this quarter there was inescapable attention on one AI-related company, Super Micro Computer, Inc. (NASDAQ:SMCI), which makes servers that hold NVIDIA Corporation (NASDAQ:NVDA) graphics processing units. Pundits wondered if Super Micro was the next AI “meme stock” set to soar like Nvidia. Super Micro’s stock price was up 255% in the first quarter and indeed is up a jaw-dropping 848% in the last year. Importantly, Super Micro is in the Russell 2000® Growth index, and alone accounted for over a third, or 2.82%, of the index’s 7.58% total return this quarter. However, Super Micro is not a company we could have ever owned. The company generated more than $7 billion in revenue in its last fiscal year, far above our current maximum revenue threshold. In fact, when the company came public in March 2007, it was already too large for our portfolio. Now, the company is so large that it moved into the S&P 500 index at the end of the first quarter. Nevertheless, not owning Super Micro was the largest detractor to our performance versus the index this quarter, comprising more than one-third of our underperformance. This, to us, is a reminder why an index is not always an accurate gauge of our short-term performance.”

Overall SMCI ranks 2nd on our list of the best stocks to buy according to Navellier & Associates. You can visit 10 Best Stocks to Buy According to Navellier & Associates to see the other Navellier & Associates-approved stocks that are on hedge funds’ radar. While we acknowledge the potential of SMCI as an investment, 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.

READ NEXT: Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June.

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

AI, Tariffs, Nuclear Power: One Undervalued Stock Connects ALL the Dots (Before It Explodes!)

Artificial intelligence is the greatest investment opportunity of our lifetime. The time to invest in groundbreaking AI is now, and this stock is a steal!

AI is eating the world—and the machines behind it are ravenous.

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Wall Street is pouring hundreds of billions into artificial intelligence—training smarter chatbots, automating industries, and building the digital future. But there’s one urgent question few are asking:

Where will all of that energy come from?

AI is the most electricity-hungry technology ever invented. Each data center powering large language models like ChatGPT consumes as much energy as a small city. And it’s about to get worse.

Even Sam Altman, the founder of OpenAI, issued a stark warning:

“The future of AI depends on an energy breakthrough.”

Elon Musk was even more blunt:

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As demand from AI data centers explodes, this company is gearing up to profit from the most valuable commodity in the digital age: electricity.

The “Toll Booth” Operator of the AI Energy Boom

  • It owns critical nuclear energy infrastructure assets, positioning it at the heart of America’s next-generation power strategy.
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AI. Energy. Tariffs. Onshoring. This One Company Ties It All Together.

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AI needs energy. Energy needs infrastructure.

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This company has its finger in every pie—and Wall Street is just starting to notice.

Wall Street is noticing this company also because it is quietly riding all of these tailwinds—without the sky-high valuation.

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This company is completely debt-free.

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The Hedge Fund Secret That’s Starting to Leak Out

This stock is so off-the-radar, so absurdly undervalued, that some of the most secretive hedge fund managers in the world have begun pitching it at closed-door investment summits.

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Why? Because excluding cash and investments, this company is trading at less than 7 times earnings.

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A New Dawn is Coming to U.S. Stocks

I work for one of the largest independent financial publishers in the world – representing over 1 million people in 148 countries.

We’re independently funding today’s broadcast to address something on the mind of every investor in America right now…

Should I put my money in Artificial Intelligence?

Here to answer that for us… and give away his No. 1 free AI recommendation… is 50-year Wall Street titan, Marc Chaikin.

Marc’s been a trader, stockbroker, and analyst. He was the head of the options department at a major brokerage firm and is a sought-after expert for CNBC, Fox Business, Barron’s, and Yahoo! Finance…

But what Marc’s most known for is his award-winning stock-rating system. Which determines whether a stock could shoot sky-high in the next three to six months… or come crashing down.

That’s why Marc’s work appears in every Bloomberg and Reuters terminal on the planet…

And is still used by hundreds of banks, hedge funds, and brokerages to track the billions of dollars flowing in and out of stocks each day.

He’s used this system to survive nine bear markets… create three new indices for the Nasdaq… and even predict the brutal bear market of 2022, 90 days in advance.

Click to continue reading…