Contemplate whether to abandon Super Micro Computer stocks and instead invest in three AI-focused stocks immediately?
Avoiding Supermicro in 2025: A Better Bet on AI
Remember when Super Micro Computer was the hottest stock in town? Well, it's time to move on and seek greener pastures in the thriving AI market. Here's why you should stay clear of Supermicro in 2025, and check out my top AI picks - Alphabet, IBM, and Nvidia instead.
Waving Goodbye to Supermicro
Supermicro's stock skyrocketed by a staggering 2,760% in two years, with numerous hyperscale data centers clamoring for its hardware for AI operations. But during March 2024, the stock hit its peak, only to fall a whopping 84.8% following delays in financial filings, casting doubt on the company's financial reporting quality. Resignations from its auditors, citing unreliable data from Supermicro's management and audit committee, didn't exactly help either.
Though the stock has risen over 125% since the November low point, the decline in credibility might be a tough nut to crack. And with new auditors on board who aren't quite global superstar Ernst & Young, long-term investors should think twice before jumping back on the Supermicro bandwagon.
Welcome to the Future with Alphabet, IBM, and Nvidia
Now let's turn our attention to the AI opportunities that don't involve compromises.
Nvidia: Time to Get Back on Board?
I've been cooling on Nvidia's stock for most of 2024, even selling shares to pocket a comfortable 775% gain in less than three years. But the stock price drop by 14% and a fresh look reveals some appealing possibilities. The rising tide of rival processor designers hasn't seemed to undermine Nvidia's leadership in the AI accelerator market, and maybe never will.
Nvidia's management team scores high in every review of its leadership quality, with soaring stock prices undoubtedly playing a part in those top scores. After all, people do tend to love working for successful companies.
Alphabet: The Evergreen Tec Giant
Alphabet's Google division is another perennial favorite on the Glassdoor "best places to work" lists. Employees love the compensation, innovative company culture, and Alphabet's leadership in providing AI computing platforms and services.
Alphabet has been a long-time success story for me, with a split-adjusted $15.03 per share investment in 2010 ballooning into 992% returns so far. And with the stock currently trading at 20.5 times trailing earnings, Alphabet is offering an attractive entrance point during these days of high inflation.
IBM: Business-focused AI Delivering Dividends
IBM has been the silent star in the AI sky, using data analytics and large language models with data safety guarantees and auditable tracking features. It took time for IBM to clear its WatsonX platform for mission-critical workloads, but IBM's loyal and expanding customer base speaks volumes about its AI prowess.
IBM's stock has doubled in the past year, and it promises to be a solid long-term investment. Its business-centric AI focus and maker of long-term planning and customer-centric strategies make IBM a textbook example of AI expertise.
So, if you're one of those savvy investors thinking ahead to the 2030s, IBM shouldn't be hard to convinced of its value.
Disclaimer: All mentioned companies rely on one of the Big 4 auditor giants – Ernst & Young for Alphabet or PricewaterhouseCoopers for IBM and Nvidia.
Investing in AI doesn't need to be a gamble.loaded with uncertainties. With companies like Alphabet, IBM, and Nvidia, you can capitalize on the AI boom without sacrificing reliability or management quality. Stay smart, stay informed, and don't miss out on the fantastic opportunities ahead. Up Next: How to Invest in AI Without Losing Your Shirt
Today, Supermicro's questionable financial reporting has led to a severe drop in its stock, making it prudent to move away from the company. Instead, consider investing in Alphabet, IBM, or Nvidia, which offer promising opportunities in the AI market without compromising on reliability or management quality.
In March 2024, Supermicro's stock experienced a massive decline of 84.8% due to delays in financial filings and doubts cast on the company's financial reporting quality, making it a risky investment today.
Alphabet's leadership in AI computing platforms and services, IBM's focus on business-centric AI, and Nvidia's dominance in the AI accelerator market provide appealing investment prospects for those interested in the AI sector.
Long-term investors should consider these companies for their potential to deliver returns, as opposed to investing in Supermicro, which may still be grappling with its tarnished reputation and new auditors.