Super Micro Computer (SMCI) Stock Upgraded to a Zacks Rank #1 (Strong Buy)

Added to the Zacks Rank #1 (Strong Buy) list this week, Super Micro Computer’s SMCI stock has become compelling among the tech sector as it looks to move past investigations into its accounting practices.Furthermore, Super Micro’s artificial intelligence initiatives are reassuring and have led to sprawling sales growth that is acknowledged even amid probes by the Department of Justice (DOJ). Super Micro’s AI Expansion  Having a strategic partnership with Nvidia NVDA, Super Micro offers various AI solutions from edge computing for real-time processing to enterprise AI and large-scale AI training. Using Nvidia’s advanced GPUs, including the chip giant’s latest Blackwell series, Super Micro has been able to optimize these AI workloads.Last month, Super Micro announced new systems and rack solutions powered by Nvidia’s Blackwell Ultra Platform, which is expected to strengthen its leadership in AI by delivering breakthrough performance for the most compute-intensive AI workloads such as AI reasoning, agentic AI, and video inference applications. Compelling Sales Growth Based on Zacks' estimates, Super Micro’s sales are expected to soar 59% in fiscal 2025 to $23.79 billion compared to $14.94 billion last year. Even better, FY26 sales are projected to spike another 46% to $34.87 billion.Image Source: Zacks Investment Research Earnings Outlook & EPS Revisions On the bottom line, Super Micro’s annual earnings are expected to increase 15% in FY25 and are forecasted to soar another 30% in FY26 to $3.33 per share. Notably, FY25 EPS estimates are slightly down over the last 60 days, but FY26 EPS estimates have spiked 14%.Image Source: Zacks Investment Research SMCI Performance & Valuation Holding up better than the tech sector's broader year-to-date decline, Super Micro's stock is up +3% in 2025 to outpace the Nasdaq’s -15%, with Nvidia shares down 24%. More impressive, over the last three years, SMCI has skyrocketed over +700% to impressively outperform the broader indexes and Nvidia’s +266%.Image Source: Zacks Investment ResearchMost compelling regarding Super Micro’s attractive growth trajectory is that SMCI is trading under $35 a share and at an intriguing 12.7X forward earnings multiple. Offering a noticeable discount to the benchmark S&P 500, SMCI trades near its Zacks Computer-Storage Devices Industry average of 11.2X forward earnings and beneath Nvidia’s 23.7X.Image Source: Zacks Investment Research Bottom Line The risk-to-reward is starting to look favorable to invest in Super Micro's stock again thanks to the company’s continued expansion in the AI realm. That said, now may be an ideal time to buy SMCI, considering the tech leader's attractive valuation and growth.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Super Micro Computer, Inc. (SMCI): Free Stock Analysis Report NVIDIA Corporation (NVDA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks