Betting on SMCI with Growth and Risk in Balance
$SUPER MICRO COMPUTER INC(SMCI)$ I bought more smci on Friday on top of purchases over the last one month, trying to build a long term position. Being a company with great growth prospects, and currently with the lowest peg ratio forward and lowest forward price to sales ratio of anything in the industry.
It's very rare to find a high growth stock in a value range but obviously the risk is that the CEO doesn't file the 10K by the deadline and that is eligible for punishment by the SEC and fines and removal from the S and P 500 and then the ultimate penalty of delisting off the exchange, this is nerve wracking., and I have no insider information which is the only kind of information that would help any one right now. So it's up to the SMCI executives and the accounting team to get this right, However, the company's revenues appear completely legitimate, because many of their biggest customers are publicly traded companies who are documenting their capital expenditures and confirming the revenue to SMCI. And Nvidia $NVIDIA Corp(NVDA)$ has confirmed SMCI is the 3rd largest customer behind only Meta $Meta Platforms, Inc.(META)$ and Microsoft $Microsoft(MSFT)$ . So simply using logic. if they are buying all these Gpus and their customers are documented buying all the Gpus put into servers by smci. Then any accounting discrepancy should be minor and not materially affect the stock price too much. And SMCI is in the hottest sector within the hottest industry of the planet., and unlike Dell $Dell Technologies Inc.(DELL)$ and $Hewlett Packard Enterprise(HPE)$ and Lenovo $Lenovo Group Ltd.(LNVGY)$ and IBM $IBM(IBM)$ and Cisco $Cisco(CSCO)$ , it is a pure play on AI servers, and is dominating the fastest growing sub-market for direct liquid cooled racks to house the servers in, which will become more necessary as GPU heat/energy demand increases geometrically.
The company could double in the next 2-3 years if all goes well, which to me is a grand slam home run.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
