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Super Micro Computer Investment Thesis
Super Micro Computer, Inc.'s (NASDAQ:SMCI) stock has been trading between ~$250 and ~$320 for about half a year, despite improving fundamentals during that time. Revenues improved 32.9% Y/Y in Q1/24
Super Micro Computer: The Competitive Advantage Should Fade But Not So Soon
Summary
- Super Micro Computer has the advantage of being first to market, but will that last?
- But SMCI has certain advantages over the established competition that make them an attractive short-term investment.
- And the market is pricing in significantly less growth than they can deliver when you factor in the growth opportunities.
My primary area of concentration will be on identifying companies of exceptional caliber, with a proven ability to reinvest capital for impressive returns. Targeting those with a market capitalization of less than $10 billion, affords ample opportunities for growth. The ideal scenario is for these companies to demonstrate a long-term capability of capital compounding, with a high enough compound annual growth rate to potentially deliver tenfold returns or even greater.My approach is to maintain a long-term perspective on these companies, as I believe this will generate higher returns compared to the market index, in a rapidly evolving investment landscape where short-term holdings are becoming increasingly prevalent.I primarily adopt a conservative investment strategy, but occasionally I may pursue opportunities with a favorable risk-reward ratio where the potential upside is substantial and downside is limited. These ventures are carefully considered and allocated a proportional amount within my portfolio to maintain overall stability.Bachelor's degree in finance and accounting All ideas and articles are provided for informational and educational purposes. Nothing contained herein is investment advice or should be construed as investment advice. All decisions that you make after reading our articles and reports are 100% your responsibility.
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