Few stocks have had a better start to 2024 than Super Micro Computer (SMCI 2.73%). After entering the year at around $285, it trades for around $580 after a phenomenal earnings report. This comes on the back of a remarkable 2023, when the stock rose 246%.

With the stock continuing to set new all-time highs, many investors may wonder if they've missed the boat on Supermicro or if there's still time to buy. Given what management said in its conference call, there may be more room for upside.

AI has been a massive boost for Super Micro Computer

One of the primary benefactors of artificial intelligence (AI) proliferation has been Nvidia, the world's top graphics processing unit (GPU) supplier. This hardware is used to do the calculations required to process data sets and form AI models. When a company creates a supercomputer to do this, it doesn't buy one or two; it buys thousands.

Connecting them efficiently isn't easy, which is where Super Micro Computer comes in.

Supermicro has a highly customizable line of servers that can be tailored to any need, whether engineering simulations, drug discovery, or AI deep learning. With many companies rushing out to buy servers to power AI workloads, Supermicro is seeing a massive business boom.

In the second quarter of fiscal year 2024 (ending Dec. 31), Supermicro had sales of $3.66 billion, up 103% from last year. This also blew away management's $2.8 billion guidance for the quarter, which is part of the reason why the stock is up so much.

But what sent the stock soaring was its financial guidance for the next quarter and the entire fiscal year.

In Q3, management expects revenue to be about $3.9 billion, indicating growth of 205%. This shouldn't surprise many, as Nvidia has been growing like this throughout most of 2023. Now that this demand is trickling down to secondary markets (like Supermicro's server business), it's getting a major boost.

Management also guided for earnings per share (EPS) of about $5.22 for Q3. This will be substantial growth compared to $1.61 EPS in the year-ago quarter.

As a cherry on top, management's revenue guidance for fiscal year 2024 (ending June 30) was increased from $10.5 billion to $14.5 billion.

Clearly, Supermicro is doing just fine, and the business is booming. But has the stock gotten ahead of itself?

Supermicro's stock isn't terribly priced

With a company undergoing a vast transformation like Supermicro, using a forward price-to-earnings ratio is the only way to go. This can be somewhat dangerous, as it uses forward projections that a company may or may not hit.

To mitigate this, I'll value the company using fiscal 2024 projections, which utilize half of a year of results and another half of projections. Unfortunately, Supermicro doesn't have full-year guidance for EPS, so I'll have to use its profit margin and growth rates to estimate Q4's EPS.

So far in fiscal 2024, Supermicro has produced $8.45 in EPS. With it slated to deliver $5.22 EPS at the midpoint in Q3, if it can maintain its margins and hit its growth targets, it should produce around $6.43 in Q4.

That's $20.10 in EPS for fiscal 2024. Dividing the stock price by that figure reveals a forward price-to-earnings ratio of about 27.

So Supermicro isn't the world's most expensive stock, but it's not the cheapest either. If it delivers at the midpoint of its earnings, the stock will likely stay flat. But if it hits the high end, don't be surprised if there's more upside in store. Furthermore, if it can continue this momentum into the end of 2024 (the first half of Supermicro's fiscal 2025), then it could be a big-time winner for investors this year even with its strong start.