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Forbes
03-07-2025
- Business
- Forbes
Super Micro Stock To $100?
CANADA - 2025/05/13: In this photo illustration, the Supermicro (Super Micro Computer) logo is seen ... More displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images) Super Micro Computer stock (NASDAQ: SMCI) has experienced a remarkable performance, increasing by nearly 10x over the last three years from approximately $5 per share in June 2022 to about $47 currently, fueled by a surge in demand for server systems driven by the generative artificial intelligence movement. While the stock faced a significant selloff in 2024 – enduring a drawdown of up to 80% at one stage – due to regulatory worries and allegations from short-seller Hindenburg Research regarding accounting discrepancies, there are indications that the markets are lifting the governance-related discounts on the stock. Super Micro stock is currently trading at about 22x estimated FY'25 earnings and 17x estimated FY'26 earnings (fiscal years end June). Is this a justifiable multiple? It likely is, particularly when you consider that the company's earnings could potentially increase by nearly 5x from FY'25 levels in the upcoming years. The stock is up 57% this year so far, and there's a chance that this robust growth could persist. Here's why. Revenue Growth Should Continue Super Micro Computer is a provider of data center solutions, selling server systems, server boards, storage, networking solutions, management software, and installation and maintenance services. SMCI is expected to grow its revenue by nearly 48% to $22 billion in FY'25 (ending June 2025), with projections indicating a further 35% increase in FY'26 to around $30 billion as expenditure on data center-related services continues strongly, with tech companies enhancing their AI and accelerated computing capabilities. There's potential for even more robust sales growth. Nvidia plans to increase production of its most recent Blackwell GPUs, which could consequently boost demand for SMCI's servers utilized for deploying the latest GPUs. Super Micro's server products have always been closely associated with Nvidia's GPU ecosystem and roadmap. The company has generally been quicker than competitors to provide server systems compatible with Nvidia's newest offerings, thanks to its modular system designs, advanced cooling and power infrastructure, and strong partnership with Nvidia for software and hardware integration. This positions SMCI to disproportionately benefit as Nvidia's Blackwell-based systems gain traction. The company serves as a key supplier of custom, high-density GPU servers for Nvidia's data center clients. Additionally, AI models are increasingly multimodal, progressing from mere text processing to integrating speech, images, video, and 3D, necessitating enhanced computing power and consequently greater demand for servers and computational capacity. Separately, if you seek better returns with less volatility than an individual stock, you might want to consider the High-Quality portfolio, which has outperformed the S&P, yielding over 91% returns since its inception. While the server market is saturated, Super Micro maintains certain competitive advantages, as its products are viewed as more customizable and energy efficient than those of its competitors. Customers of Super Micro are also expected to favor higher-end products. For instance, the company anticipates that expensive liquid-cooling systems for servers, which were fairly uncommon prior to the AI era, will be installed in 30% of the server racks it ships next year. The company is also continually enhancing its production capacity. If it manages to elevate its sales by an additional 35% in FY'27, this would elevate sales to around $54 billion for that year. This would result in a growth rate of about 2.5x over three years. Margins Could See Turnaround Combining this better-than-expected revenue growth with the fact that Super Micro's adjusted net margins (net income or profits after all expenses and taxes, expressed as a percentage of revenues) could witness a notable turnaround. Although net margins have been declining, falling to around 6.4% in the first nine months of 2025 from about 10% in the same period last year, prospects for improvement could arise from economies of scale and a more favorable product mix leaning towards premium offerings. The company has experienced some pressure on its gross margins in recent quarters due to a higher proportion of liquid-cooling systems being sold, which are costly to manufacture. Liquid cooling technology has also posed challenges in terms of large-scale implementation, as concerns about reliability, including issues like leaks and condensation, have complicated matters. However, Super Micro seems to have effectively tackled this technical hurdle, deploying these systems at a relatively large scale. Thus, the higher upfront costs and resulting margin pressures may ultimately serve as a worthwhile long-term trade-off, potentially granting the company a competitive edge in the AI hardware space. Additionally, the company's main fixed costs, such as research and development as well as selling and general expenses, are expected to rise at a slower rate than its revenues, which could further enhance margins. Given this, it might be reasonable to assume that Super Micro's adjusted net margins could double from FY'25 to FY'28, reaching approximately 12%. related: Why are SMCI margins so low? Valuation Multiple Could Contract At A Slower Pace If revenues increase by roughly 2.5x between FY'25 and FY'27, with margins expanding by about 2x during the same timeframe, this would indicate that earnings could rise by about 5x. If earnings indeed grow by 5x, the P/E multiple is expected to decrease to around a fifth of its current level, assuming the stock price remains unchanged. However, this is precisely what Super Micro investors are counting on not happening! Should earnings expand by 5x in the next few years, rather than the P/E falling from approximately 22x now to under 5x, we believe that the multiple could stabilize at approximately 10x. This could make an increase of over 2x in Super Micro stock a tangible prospect in the medium term – with the stock potentially reaching beyond $100 per share. What about the timeline for this high-return scenario? In reality, whether it takes 2 years or 3 won't make a significant difference – as long as Super Micro continues on this trajectory of revenue growth with margins on the rise, the stock price could respond accordingly. That being said, it's crucial to balance this potential upside with a recognition of past issues. Super Micro has been scrutinized regarding corporate governance – including allegations of accounting anomalies, delays in SEC filings, and pressure from short-sellers. While the company has implemented measures to resolve these concerns, investors should consider this history as they assess the sustainability of the current growth narrative. While investing in individual stocks carries risks, the Trefis Reinforced Value (RV) Portfolio has surpassed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices), delivering solid returns for investors. Why is that? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks has provided a responsive strategy to capitalize on favorable market conditions while minimizing losses during downturns, as elaborated in RV Portfolio performance metrics.
Yahoo
24-06-2025
- Business
- Yahoo
No one from Adani charged with US graft: chairman
Adani Group chairman Gautam Adani denies any wrongdoing in response to US allegations of bribery, telling shareholders that no individual from the group has been charged under foreign corruption laws. "Despite all the noise, the facts are that no one from the Adani Group has been charged with violating the FCPA (Foreign Corrupt Practices Act) or conspiring to obstruct justice," the billionaire said at the company's annual general meeting on Tuesday. "Even in the face of the storms and relentless scrutiny, the Adani Group has never backed down," he said. In November, US authorities indicted Adani and several executives, alleging they paid bribes to secure Indian power contracts and misled US investors. The Adani Group has rejected the allegations as "baseless" and said it was co-operating with legal processes. Adani Group and its 13 offshore investors have been facing an investigation by the Securities and Exchange Board of India since Hindenburg Research in 2023 alleged the group's improper use of tax havens. The group has consistently denied any wrongdoing. The company, which is building the world's largest renewable energy park in Khavda, western India, aims to install 50 gigawatts of renewable capacity by 2030. With combined thermal, renewable and pumped hydro assets, Adani Group expected to reach a total power generation capacity of 100GW by 2030, Adani said. Adani also announced a record capital expenditure plan, saying the group expects to invest between $US15 billion ($A23 billion) and $US20 billion annually over the next five years. Error in retrieving data Sign in to access your portfolio Error in retrieving data
Time of India
24-06-2025
- Business
- Time of India
Gautam Adani's net worth: Inside India's second-richest man's massive empire as he plans to spend $20 billion in five years
Gautam Adani addressed the Adani Group's AGM, highlighting India's resilience amid global challenges. His net worth has rebounded to $63.1 billion, ranking him 25th globally after a challenging period following allegations from Hindenburg Research. The group's market value recovered significantly after India's Supreme Court ruled in its favor, boosting investor confidence. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Adani Group 's Annual General Meeting (AGM) for FY26 began on Tuesday, with chairman Gautam Adani commenting on India's resilience amid ongoing global conflicts, bribery allegations, and key updates across the conglomerate's businesses, including its energy, airport, and other Gautam Adani has been ranked the 25th richest person in the world, according to the latest Forbes Real-Time Billionaires List. As of now, his net worth stands at $63.1 billion, a significant recovery from the lows seen in early the chairman of the Ahmedabad-headquartered Adani Group, oversees a vast empire with interests spanning ports, airports, power generation and transmission, and green energy. The group began as a commodities trading firm in 1988 and has grown into one of India's most influential conglomerates, often seen as aligned with Prime Minister Narendra Modi's infrastructure billionaire's financial standing suffered a major blow in January 2023 after US-based Hindenburg Research accused the Adani Group of stock manipulation and accounting fraud. While the group denied any wrongdoing, the fallout led to a sharp fall in the value of its listed the tide turned a year later when India's Supreme Court ruled in favor of the Adani Group, effectively clearing the way for renewed investor confidence. Since then, the group's market value has rebounded significantly, contributing to Gautam Adani's climb back into the top 30 richest people is currently India's largest airport operator and controls Mundra Port , the country's biggest commercial port located in Gujarat. His infrastructure expansion continues to attract both global investment and regulatory volatility, Gautam Adani remains a central figure in India's economic landscape, and his net worth trajectory reflects both the ambition and fragility of rapid industrial growth in emerging markets.
Time of India
11-06-2025
- Business
- Time of India
GQG's Jain cuts AI exposure on data centre woes, backs utilities
Rajiv Jain , manager of the $23 billion GQG Partners Emerging Markets Equity Fund , is trimming exposure to investments linked to artificial intelligence on concerns of waning data-centre demand, while remaining bullish on utilities. Utility companies in Asia have flagged that hyper-scalers are paring back data-centre demand numbers following the region's aggressive AI growth, Jain said Wednesday at the Morgan Stanley Australia Summit in Sydney. 'What we've learned from a lot of utilities is that there's probably some more double counting. The numbers might be overstated here' on data-centre appetite, he said. The buzz around artificial intelligence is approaching the 'late innings, rather than the mid- or early innings,' he added. Known for his contrarian bets, Jain bought into Adani Group stocks in 2023 when shares tanked in the fallout from a Hindenburg Research report that alleged accounting fraud. The fund's stake in the group swelled to $10 billion in value a year later as stocks recovered, up from an initial investment of $1.9 billion. The fund is positive on utilities globally over artificial intelligence, with Jain saying that the sector will continue to benefit from investments in power generation , distribution and transmission. Live Events
Yahoo
10-06-2025
- Automotive
- Yahoo
Nikola Founder Trevor Milton releases new documentary
The rise and fall of Trevor Milton, founder and former executive chairman of battery electric truck maker Nikola, was a story that took the trucking industry by storm. A bombshell report in 2020 by Hindenburg Research launched accusations of fraud, saying Milton lied about the capabilities of Nikola's product, alleging nepotism, and more. Ultimately, this led to investigations into Milton and Nikola, an ousting of him as CEO, and a 2023 conviction that slapped him with a sentence of four years in federal prison. At the start of this year, President Trump pardoned Milton and now he is setting the record straight of his own volition. Milton and his team have released a documentary, 'Conviction or Conspiracy – The Trevor Milton Saga', streaming free and open access on YouTube. In a press release, Milton said, 'For years, I've been silent—forced to sit back while the media, opportunists, and corporations ran wild with their version of my story. Today, that silence ends. I want people to watch the film, think for themselves, and finally get the full picture.' 'This isn't just my story—it's a warning about how quickly our system can be weaponized,' Milton added. 'This film gives people the context and evidence that was left out of the headlines. I'm proud it's finally out.' The film hit YouTube to ensure 'unrestricted global access.' Find it here: The post Nikola Founder Trevor Milton releases new documentary appeared first on FreightWaves.
