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Supermicrocomputer vs. Intel

This year has been an incredible year for many companies, especially technology players active in the field of artificial intelligence (AI). They have posted gains in all three indexes, from the S&P500 and the Nasdaq to the Dow Jones Industrial Average. In fact, new Dow member Nvidia is on track for top performance in that index this year thanks to its AI strengths.

Investors have rushed into AI stocks because the technology promises to be revolutionary and will mark history, just like the development of the telephone or the Internet. Analysts expect the current $200 billion AI market to cross the $1 trillion mark by the end of the decade, allowing companies and investors entering this space now to make big profits.

Yet not every AI company has reaped the rewards in recent times. Super microcomputer (NASDAQ: SMCI) And Intel (NASDAQ: INTC) both have faced challenges in recent months, and this has weighed on their stock performance. Which is a better recovery story buy for 2025? Let’s find out.

Image source: Getty Images.

Supermicro shares soared higher in the first half of the year, rising 188%. The company makes equipment such as servers and workstations, and demand from AI customers has skyrocketed. This has translated into triple-digit quarterly revenue growth.

But several news reports hurt Supermicro in the second half of the year. First, a brief report from Hindenburg Research claimed there were problems at the company. Subsequently, Supermicro postponed the filing of its 10-K annual report and later the filing of its 10-Q quarterly report. Meanwhile, the company’s accountant resigned, and the late financial filings put it at risk of a delisting from the Nasdaq stock exchange.

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The stock fell 67% from the Hindenburg report to its lowest level in mid-November. But better news has emerged in recent weeks. Supermicro found a new auditor and submitted a plan to Nasdaq to regain compliance. Nasdaq has since granted an extension until February 25, and Supermicro expects to file by then.

So the worst could be behind Supermicro, setting it up for a potential recovery in 2025.

Intel dominates the market for central processing units (CPUs), the main processors that power most computers. But a few issues have weighed heavily on this tech giant. First, it is losing market share Advanced micro devices in the desktop CPU market. Second, Intel has failed to get into the AI ​​market early, and while it has come out with compelling products in recent quarters, it has struggled to catch up with the leaders.

In addition, some investors worried about the investments involved in Intel’s decision to become a chipmaker and offer foundry services not only to itself but also to rivals. Spending has had an impact on the company’s free cash flow in recent years.

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