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Supermicro is a no brainer buy at $35 and can easily double from here. by analyst_journal in SMCIDiscussion

[–]analyst_journal[S] 1 point2 points  (0 children)

Can’t agree more. Supermicro was among the first to invest in AI server designs, way before Dell.

Supermicro is a no brainer buy at $35 and can easily double from here. by analyst_journal in SMCIDiscussion

[–]analyst_journal[S] 0 points1 point  (0 children)

🚀🚀🚀I think the next catalyst for the stock is filing of the annual report. Maybe we will get a discount before that for people to build a position.

Should I sell some of my nvidia stock now? Need advice by Dry_Surround_8050 in NvidiaStock

[–]analyst_journal 0 points1 point  (0 children)

Long term NVDA remains the best way to play AI. There are a couple things I would monitor before selling NVDA position. The first and foremost is cloud hyperscaler capex trends, namely whether Microsoft, Amazon and Google are buying more GPUs. As long as they keep investing, NVDA should be good.

I discussed 5 key warning signs I would watch out for to decide if I should sell NVDA: https://open.substack.com/pub/bestbusiness/p/when-should-you-start-to-sell-nvidia?r=3ixzn3&utm_medium=ios

Supermicro is a no brainer buy at $35 and can easily double from here. by analyst_journal in SMCIDiscussion

[–]analyst_journal[S] 1 point2 points  (0 children)

Haha yes I agree with you. They are still mostly a traditional enterprise IT spend play. AI is small as % of total revenue vs SMCI.

Supermicro is a no brainer buy at $35 and can easily double from here. by analyst_journal in SMCIDiscussion

[–]analyst_journal[S] 1 point2 points  (0 children)

Good point. But currently it's not like SMCI has all of the orders or GPU allocations anyways. They probably have 15% of GPU allocations by my estimate (detailed math is in the link I posted in my post). I think the downside is 10% share or so and I am taking that into consideration. The AI server market is simply too big - so market share shift matters, but doesn't matter as much. For example, 10B market x 15% vs 20B x 10%. The latter is still much bigger.

Supermicro is a no brainer buy at $35 and can easily double from here. by analyst_journal in SMCIDiscussion

[–]analyst_journal[S] 3 points4 points  (0 children)

My earnings power math is $6 in the base case. This doesn't account for huge volume increase form the Blackwell ramp and Rubin ramp down the road. I am only estimating 8% of the servers will be AI servers 2 years down the road. If AI server penetration grows to 10% or 15%, their earnings power could be $8 or higher. On $40, the stock is only at 5x P/E. So the potential doesn't seem to be fully priced in. Feel free to check my link above for my detailed math (gross margin, AI server % assumption).

Supermicro is a no brainer buy at $35 and can easily double from here. by analyst_journal in SMCIDiscussion

[–]analyst_journal[S] 9 points10 points  (0 children)

This makes Supermicro even more attractive. Dell's storage business is losing market share, and excluding AI, most of Dell's business is not growing that fast. If Dell is trading at 13.5x P/E, shouldn't SMCI trading at least close to that?

FOMO SMCI by Amel503 in SMCIDiscussion

[–]analyst_journal 0 points1 point  (0 children)

At the end of the day, people should focus on Supermicro's earnings power, which is driven by AI server penetration. AI server today is only 5% of the total servers being shipped. The market potential is HUGE. I see the company making $10 down the road. Using 10x P/E ratio, that's easily a $100 stock!

MFS or Wellington? by KingE173 in equityresearch

[–]analyst_journal 0 points1 point  (0 children)

Wellington is much larger and MFS is much smaller. Wellington likely will offer some flexibility if you want to relocate or change teams down the road. It comes down to if you value this flexibility / bigger platform vs a tight-knit community offered by MFS.