• Shares of Super Micro Computer skyrocketed 1,700% over the last two years, and the company was recently added to the S&P 500 Index.
• Super Micro Computer designs and manufacturers high-performance servers for artificial intelligence workloads, and its rapid time-to-market capabilities are driving share gains.
• Wall Street expects Super Micro Computer to grow earnings per share at 49% annually over the next three to five years, which makes its current valuation look quite reasonable.

Super Micro Computer (SMCI) became the newest artificial intelligence (AI) company in the S&P 500 when it joined the index in March 2024, little more than a year after it joined the S&P MidCap 400 in December 2022. Meanwhile, shares soared over 1,700% over the last two years as strong demand for AI computing products fueled rapid sales growth.

Supermicro shares plunged 15% when the company reported Q3 FY financial results that missed estimates on the top line, but investors may have overreacted. Revenue increased 200% to $3.8 billion during the quarter, just short of the 209% growth Wall Street anticipated. However, non-GAAP net income still surged 308% to $6.65 per diluted share, easily topping the 255% growth that analysts forecasted.

The stock still carries a consensus rating of “buy” among Wall Street analysts, and the median price target of $965 per share implies 26% upside from its current price of $762 per share. Here's what investors should know about Supermicro.