Super Micro Computer (SMCI 7.62%) isn't new to the tech industry. The maker of servers, workstations, and full rack scale solutions actually has been around for 30 years -- but growth just took off over the past few years thanks to demand from artificial intelligence (AI) customers. Companies are developing AI programs, and for this, they need the items that Supermicro builds.
The tech player said in the most recent quarter demand for its AI rack scale solutions including chips from leaders like Nvidia and Advanced Micro Devices soared to record levels. And all of this has helped earnings and the share price surge. How much would you have today if you'd invested $5,000 in this AI star five years ago? Let's find out.
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Serving the AI customer
If you'd bought $5,000 worth of Supermicro stock five years ago, today that investment would be worth a whopping $220,000. That's because Supermicro stock has soared more than 4,300% in that time period. This enormous win is due to Supermicro's ability to serve the AI customer and keep up with the fast pace of innovation in the industry.
The company is able to do this for two reasons. First, Supermicro's building block method of constructing its products involves the use of many common components -- this speeds up the process of customizing products for customers. And second, Supermicro closely follows leading chipmakers' latest innovations so the company can immediately include them in its systems.
This strategy clearly has paid off. In the most recent quarter, sales and net income soared in the triple digits -- and sales levels of more than $3 billion in a quarter surpassed annual revenue as recently as 2021.
But don't worry if you haven't bought shares of Supermicro yet. The AI growth story is in its early stages, with the market forecast to reach more than $1 trillion in 2030. And that means Supermicro shares still may have plenty of room to run.
