$SUPER MICRO COMPUTER INC(SMCI)$ It's clear that, as long as demand for AI products and services keeps growing, Nvidia and Supermicro will benefit. And the companies both have established solid earnings and share performance track records. The one thing that sets them apart right now is valuation. Nvidia trades for 38 times forward earnings estimates, while Supermicro trades for only 12 times estimates.
Earlier in the year, their valuations were similar -- and at one point Supermicro was even more expensive. Recently, though, two pieces of news have weighed on the equipment maker. Short-seller Hindenburg Research issued a report alleging troubles at Supermicro, and, separately, Supermicro delayed the filing of its 10-K annual report. From what we know so far, I don't see these as issues that change Supermicro's long-term story -- and that means Supermicro looks dirt cheap, making it the better buy right now.
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