A Bargain-Priced Artificial Intelligence Company.

An AI image of Christmas on the moon, in the style of anime.

A Bargain-Priced Artificial Intelligence Company.
Artificial intelligence has been the hottest thing on Wall Street for the past few years. Most of the companies are trading at very expensive prices. Nvidia is up ten-fold over the past two years. However, there is one very high growth artificial intelligence company that is trading at a discount of 67% off the highs set in March of this year. Why did investors give up on the company? Were they wrong?
 
Here are the things we’ll cover in this blog.
 
The Hottest AI Growth Stock
Hindenburg Research’s Accusations
A Special Independent Committee’s Report
Super Hot and a Super Bargain?
Why Feb. 25, 2025, is an Important Date
Tariffs, China and National Security
The Nvidia of Servers
Reducing Risk with AI ETFs
 
And here is more information on each topic
 
The Hottest AI Growth Stock
Super Micro Computer shows up as the clear leader on our Artificial Intelligence Stock Report Card, with year-over-year revenue growth of 143%. (If you’d like an updated AI Stock Report Card, email [email protected].) The company forecasts that next year’s revenue could double over fiscal 2024. The September quarter grew 150% from last year, to $5.31 billion, while the December 2024 quarter is expected to bring in net sales of $5.5 - $6.1 billion, an increase of 67% annually.
 
Hindenburg Research’s Accounting Manipulation Accusation on 8.27.2024
Hindenburg Research, a notorious short seller, accused Super Micro Computer of accounting manipulation on August 27, 2024. A month later, on September 26, 2024, The Wall Street Journal reported that the U.S. Justice Department was looking into the accusations. As a result, between mid-August and mid-November, the Super Micro Computer share price dropped by more than half – and was down 85% from the high of $123/share set on March 8, 2024.
 
Incidentally, anyone who purchased at the low of November 15 ($17/share) has doubled their money since then. On Sept. 16, 2024, Icahn Enterprises celebrated the dismissal of a class action lawsuit that had been based upon alleged “false and misleading reports published by Hindenburg.” So, other companies have successfully argued against Hindenburg’s “research.”
 
A Special Independent Committee’s Report
On December 2, 2024, Super Micro Computer released a press release, writing that the Special Committee found no evidence of misconduct by the company. The expectation is that there will be no restatement of reported financials. SMCI’s stock has been rallying since November 15, 2024. However, it is still down about 67% from the March high.
 
Super Hot and a Super Bargain?
So, is Super Micro Computer super hot and a great buy? If the forward outlook turns out to be accurate, then absolutely. The price/earnings ratio is 20, which is low for such a high growth company. As I mentioned above, 2025 revenue is expected to double over 2024. Of course, the proof is in the pudding. We’ve got to see those earnings reports in order to believe them.
 
That is likely why Super Micro Computer’s share price is still trading at a bargain, even though the Independent Special Committee has cleared them of wrongdoing. Investors are also waiting to hear from the Department of Justice.
 
A lot of Super Micro Computer’s troubles stem from a lawsuit by Bob Luong, a former employee and whistleblower. It’s become a bit of a drama because it has been reported that Super Micro Computer fired Luong for bullying people who reported to him, and for skipping meetings, yelling, cursing, and routinely being absent from work. There can be a lot of money made by being a whistleblower and by short selling stock. Somebody placed a very large put order on Super Micro Computer in July. More will likely be revealed over the coming months in this matter. However, being cleared by the Independent Committee and delivering outstanding earnings reports are positive omens.
 
Why Feb. 25, 2025, is an Important Date
The NASDAQ Stock Market has granted a request by Super Micro Computer to file its annual earnings report by February 25, 2025. If the 10-K filing is indeed just an official documentation of what has already been reported as an outstanding fiscal year 2024 with $14.94 billion in net sales (more than double what it was in 2023), investors should get very excited. The December 2024 quarter results should be announced at the end of January.
 
Tariffs, China and National Security
Artificial intelligence is a highly protected industry. There are restrictions on what can be shared with certain countries, particularly China and Russia. As a result of trade restrictions, one of Super Micro Computer’s partners, Nvidia, has seen their Chinese revenue drop from 22% last year to 15.4% in the most recent quarter. Silicon Valley partners are more than making up for the weakness in Asia, accounting for half of Nvidia’s revenue.
 
Super Micro Computer, Nvidia and many other technology companies use Taiwanese factories to build their products. Given the geopolitical risks, and China’s aggressive moves to bring Taiwan closer to its authority, this is a threat that all investors should be aware of. An invasion of Taiwan would mean all the chips are down. However, even without an invasion, the war of words between Washington and Beijing is raging. America is threatening China with tariffs. China is restricting exports of certain rare earth minerals. The Chinese are investigating Nvidia for Antitrust violations. China is also suspected of being behind targeted cyberattacks on Super Micro Computer that occurred in 2015 and 2018.
 
The Nvidia of Servers
Super Micro Computer has been called the Nvidia of servers. At the 2024 Computex, Super Micro Computer CEO Charles Liang was joined by Nvidia CEO Jensen Huang on stage for the keynote. (Click to check out that video.) It’s a positive sign when a $24 billion company is a partner of a $3 trillion company in the world’s hottest industry.

Reducing Risk with AI ETFs
The volatility of Super Micro Computer’s share price illustrates the risk of investing in individual companies. The reticence of people to buy low, even after the company has been cleared of misconduct by an independent committee, is further evidence that our emotions often work against us. When we wait for the headlines, it’s too late to invest. Nvidia is proof of that. If we buy Nvidia today, we are purchasing a company that is valued at $3 trillion with only $30 billion in net income. Nvidia‘s price/earnings ratio is a very lofty 55. Yet, this is the company that everybody wants to invest in – purchasing for a price that is 10 times what it was two years ago (buying high).
 
Purchasing a targeted Artificial Intelligence ETF is one way to reduce risk and potentially increase performance of our nest egg. Nvidia and Super Micro Computer are two of the top holdings in the iShares Future AI and Tech ETF: symbol ARTY. The ARTY ETF is trading at a two-year high. So, dollar cost averaging in might be a good strategy for adding an AI ETF to our wealth plan.
 
Bottom Line
Super Micro Computer is very popular with its partners and its customers. However, a disgruntled employee and a short seller have certainly had their impact on the company’s share price. (Still waiting to hear from the DOJ.) It appears that the worst of it might be behind them. There is always a possibility of the Department of Justice finding some merit to Luong‘s claims that the Independent Committee overlooked. However, if SMCI’s troubles are behind them, a $40 price is a great deal, particularly when most AI companies are trading at multiples that are double or triple where SMCI is currently.
 
Full disclosure: I own shares of Super Micro Computer. 
 
​
​

Join us for our Online New Year, New You Financial Freedom Retreat Jan. 10-12, 2025. Email [email protected] or call 310-430-2397 to learn more. Register with friends and family to receive the best price. Click for testimonials, pricing, hours & details.

Join us for our Restormel Royal Immersive Adventure Retreat. March 7-14, 2025. Email [email protected] to learn more. Click for testimonials, pricing, hours & details. Register now. There is only 1 room available. This retreat includes an all-access pass to all of our online training for a full year for two, and three 50-minute private, prosperity coaching sessions. Much more affordable than you might think. Email [email protected] to learn more.

Natalie Wynne Pace is an Advocate for Sustainability, Financial Literacy & Women's Empowerment. Natalie is the bestselling author of The ABCs of Money and The Power of 8 Billion: It's Up to Us, and is the co-creator of the Earth Gratitude Project. She has been ranked as a No. 1 stock picker, above over 835 A-list pundits, by an independent tracking agency (TipsTraders). Her book The ABCs of Money remained at or near the #1 Investing Basics e-book on Amazon for over 3 years (in its vertical), with over 120,000 downloads and a mean 5-star ranking. The 6th edition of The ABCs of Money and the 2nd edition of Put Your Money Where Your Heart Is are the most recent releases of these books. Follow her on Instagram. 
​​​​​
Natalie Pace's easy as a pie chart nest egg strategies earned gains in the last two recessions and have outperformed the bull markets in between. That is why her Investor Educational Retreats, books and private coaching are enthusiastically recommended by Nobel Prize winning economist Gary S. Becker, TD AMERITRADE chairman Joe Moglia, Kay Koplovitz and many Main Street investors who have transformed their lives using her Thrive Budget and investing strategies. Click to view a video testimonial from Nilo Bolden.​​

---

Check out Natalie Pace's Substack podcast on Apple and Spotify.
Watch videoconferences and webinars on Youtube.

Other Blogs of Interest
Canadian, Australian and U.S. Banks. Are Any of Them Safe?
Ireland. Rich in Technology, Biotechnology and Agribusiness. 
Black Friday and Cyber Monday Sweepstakes.
Robo Investing and AI. No, They are Not Foolproof.
Stocks Soar as Nvidia Joins the DJIA. 
Copper. Peru ETF Outperforms the S&P500.
4 Ways to Celebrate World Sustainability Day, Oct. 30, 2024.
Will There be a Santa Rally or will the Election Ruin Everything?
The Chips are Down.  ASML, Intel and Super Micro Computer Plunge. Is Nvidia Next.  
Will Insurance Companies & Homeowners Weather the Hurricanes?
9 Money Secrets of the Ultra Wealthy.
Housing & Budgeting Solutions.
Will Boeing Be Booted Out of the Dow Jones Industrial Average?
Arkansas Sues Temu for Data Theft.
We Must Be the Boss of Our Money. Why?
Oil Prices Tumble. Why?
Sweepstakes for the Release of The ABCs of Money. 6th Edition. 
Should You Go Conservative or Aggressive? 
Fast Fashion. Fossil Fuels. Plastic Clothing. Atacama Desert Waste Dumps. 
Can Crowdstrike Recover from its Colossal Catastrophe? Featuring a Cybersecurity Overview.
Fintechs and Brokerages that Fail are Not FDIC-Insured.
Stocks Keep Hitting New Highs. Are You Thinking "Capture Gains?"
5 Green Tips for Clean Beaches Week.
Nio Sales Expected to More Than Double in 2Q 2024.
So, You Think You Want to Be a B&B Owner...
Retiring Soon? Start Planning Now.
2024 Rebalancing IQ Test. 
Answers to the 2024 Rebalancing IQ Test. 
May is National Bike Month. Paris and Amsterdam are the Stars.
Vacations that Color Our World Forever.
9 Inflation, Budgeting, Debt Reduction and Investing Solutions.
China & Russia Double Their Gold Holdings. 
2024 Investment of the Year?
Bitcoin Sets a New Record High. The Importance of Rebalancing. 
Uh. Oh. More Bank Trouble.
Housing. Unaffordable. What Works? Case studies and creative solutions. 
2024 Investor IQ Test.
Answers to the 2024 Investor IQ Test.
The Underperforming DJIA, Full of Fossil Fuels and Forever Chemicals.
A Spectacular Year for 3 of the Magnificent 7.
The Best ROI* (Almost 40%!) & 7 Life Hacks That Save Thousands.
Portugal Eliminates Tax Advantages for Ex-Pats.
WeWork's Bankruptcy. Half-Empty Office Buildings. Problems in our Personal Wealth Plan.
Cruise Ships Give Freebies to Investors. Should You Take the Bait? Should You Take a Cruise?
Bonds. Banks. The Treacherous Landscape of Keeping Our Money Safe.
7 Rules of Investing
13 Lifestyle Choices to Reduce Waste, Pollution & CO2 & Save a Boatload of Dough.
China Bans Apple
11-Point Green Checklist for Schools.
10 Wealth Secrets of Billionaires and Royals.
Bank of America has $100 Billion in Bond Losses (on Paper)
Fiat. Crypto. Gold. BRICS. Real Estate. Alternative Investments.
BRICS Currency. Will the Dollar Become Extinct?
Are There Any Safe, Green Banks?
7 Ways to Stash Your Cash Now. Lessons from the Silicon Valley Bank Failure.
Which Countries Offer the Highest Yield for the Lowest Risk?
Why We Are Underweighting Banks and the Financial Industry.
​Save Thousands Annually With Smarter Energy Choices
Is Your FDIC-Insured Cash Really Safe? 
Money Market Funds, FDIC, SIPC: Are Any of Them Safe? 
My 24-Year-Old is Itching to Buy a Condo. Should I Help Him?
The 12-Step Guide to Successful Investing.
The Bank Bail-in Plan on Your Dime.

Important Disclaimers
Please note: Natalie Pace does not act or operate like a broker. She reports on financial news, and is one of the most trusted sources of financial literacy, education and forensic analysis in the world. Natalie Pace educates and informs individual investors to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned by Natalie Pace are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable. However, NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.