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  • Writer's pictureT. Livingston

SMCI Looks Super

Super Micro Computer, SMCI, is a stock a believe has the potential to be a true market leader in 2024. Two major themes I've been monitoring are crypto and AI, as I believe these innovations may lead to a "Roaring 2020s." As demand for AI infrastructure broadens, stocks like NVDA and SMCI are positioned to profit handsomely off this trend. This is why SMCI was one of the strongest stocks in 2023 and why its' earnings are estimated to grow by 48% in 2024.

There are a few things that really stand out to me about Super Micro Computer. The first is that it has a history of strong earnings and sales growth. In addition, return on equity is a healthy 40% and management owns 15% of its' shares. This indicates that the company is well-run, and its' insiders are bullish on the future. In addition, SMCI has seen a steady increase in fund ownership over the last year, another positive for bulls.

SMCI's chart is what impresses me the most, and frankly, it is the technical side that always outweighs the fundamental perspective. SMCI rallied strong in 2023 from May to August on heavy skyscrapper volume. This type of buying is not your "Aunt Suzy" buying, as William O'Neil would say. It is funds and institutions coming in to purchase the stock. Since then, SMCI has been basing out. I really like the way this base has formed on mostly lighter volume, with mostly constructive action. This January, SMCI has rallied sharply and is now building out the right side of a cup and handle base. I will be looking to purchase SMCI on a pullback towards the 50-day moving average or on a breakout.

Risk right. Sit tight.

To learn more about swing trading strategies, stock market trading, and how to trade cryptocurrencies, visit my course page.

Full Disclosure: I currently own NVDA.

Disclaimer: This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this post constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog or the associated Twitter and Instagram feeds. The stock or stocks presented are not to be considered a recommendation to buy any stock or stocks. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.


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