Withdraw, retreat.
Certainly, Nvidia‘S (NASDAQ: NVDA) The share price has fallen slightly in recent days. But that doesn’t change the fact that chip stocks are up 154.9% so far this year. Nvidia remains a big winner for investors.
It’s not the biggest winner in the S&P500, although. Meet the only S&P 500 stock to outperform Nvidia so far in 2024.
The only Nvidia beater
Only three stocks in the S&P 500 have posted gains of 100% or more this year. Nvidia is still ahead of any of them. VistraThe return of 132.2% is not quite at Nvidia’s level. However, Nvidia is far behind the S&P 500’s best-performing stocks.
Super microcomputer‘S (NASDAQ: SMCI) shares are up 196.6% so far in 2024. The gains were even more impressive earlier this year. Super Micro shares were up a stunning 318% so far this year in mid-March.
The IT solutions provider is not only having a great year; it’s had a fantastic decade. Ten years ago, Super Micro Computer’s market cap was less than $1.2 billion. It reported revenues of $1.16 billion in the previous fiscal year with profits of just $21.3 million.
Today, Super Micro Computer’s market capitalization is over $49.3 billion. Wall Street expects the company to generate sales of nearly $15 billion in the fiscal year ending June 30.
What put the “super” in Super Micro Computer this year
Why is Super Micro Computer stock performing so well in 2024? In large part, this is up 246% last year for the same reason: rising demand for servers and storage systems powered by artificial intelligence (AI).
Super Micro’s success went hand in hand with Nvidia’s. In the latest quarter, the company saw record demand for its AI rack-scale direct liquid cooling (DLC) systems, including systems with Nvidia’s H100 graphics processing units (GPUs). Super Micro was the first to commercialize development for Nvidia’s GH200 (Grace Hopper) and GB200 (Blackwell) platforms.
It also helped that Super Micro Computer was added to the S&P 500 index in March. As a result, all mutual funds and exchange-traded funds (ETFs) that track the S&P 500 were required to purchase shares of Super Micro.
There has been only one development that has weighed on Super Micro’s rising share price. On March 19, the company announced a public equity offering of 2 million shares. While it’s not surprising that Super Micro took advantage of the huge share price gains to raise money, this move diluted the value of its existing shares.
Are Super Micro Computer Stocks Still a Smart Choice?
The AI boom shows no signs of slowing down anytime soon. Nvidia executives announced that demand for the upcoming Blackwell GPUs is huge – a good sign for Super Micro.
Is Super Micro Computer stock still a smart choice after blistering gains? Valuation could become an issue if demand for AI systems decreases. Cautious investors should probably look elsewhere.
However, Super Micro’s expected earnings figures, around 26, are not too high given the company’s growth prospects in the coming years. Aggressive investors with long-term perspectives could still benefit from the S&P 500’s top stocks from 2024 to date.
Should You Invest $1,000 in Super Micro Computer Now?
Consider the following before buying shares in Super Micro Computer:
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.
Meet the First S&P 500 Stock to Outperform Nvidia So Far in 2024, originally published by The Motley Fool
