"Super Micro Computer Inc. ( NASDAQ: SMCI) stock has its bullish supporters, some of whom feel it can withstand global trade issues and that it may be one of the best artificial intelligence (AI) stocks going forward. But it is also a target of short sellers, with more than 16% of shares held short. In the past month, Supermicro expanded its partnership with Nvidia Corp. ( NASDAQ: NVDA) and announced a new business line offering a one-stop source for data center facilities equipment and services."
"While the artificial intelligence-fueled tech rally sputtered when tariff concerns grew, it seems to have resumed. Companies that can diversify to address the many demands the industry faces ultimately are poised to profit. Supermicro is one of those companies. The San Jose-based tech firm specializes in high-performance and high-efficiency servers, but it also provides software solutions as well as storage systems for data centers and enterprises focused on cloud computing, AI, 5G, and edge computing."
"AI stocks in general have felt the effects of trade war concerns, and Supermicro's margins have come under pressure. It aims to shrink its margins to increase production capacity to meet demand. Earlier in the year, the company said it was expanding its manufacturing capacity in the United States, Taiwan, and Europe to meet increasing demand, particularly for liquid-cooled data center solutions."
Super Micro Computer focuses on high-performance, high-efficiency servers and offers software and storage for cloud, AI, 5G, and edge computing. The company expanded partnerships with Nvidia and collaborations with Ericsson, and launched a business line for data center facilities equipment and services. Supermicro expanded manufacturing capacity in the United States, Taiwan, and Europe, emphasizing liquid-cooled data center solutions. Fiscal first-quarter results showed disappointing performance with sinking gross margins, and the company is accepting narrower margins to increase production capacity. More than 16% of shares are held short, while some analysts remain bullish about five-year upside potential.
Read at 24/7 Wall St.
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