Wednesday's IBD 50 Stocks To Watch pick, artificial intelligence leader Super Micro Computer, is one of the best stocks to buy and watch right now. The AI stock surged past a buy point Tuesday.
The San Jose, Calif.-based company makes enterprise computer hardware optimized for applications such as cloud computing, AI, data storage and telecommunications.
Super Micro sales have gotten a boost from major cloud service providers investing in systems for generative AI. The company works closely with AI chip providers including Advanced Micro Devices, Intel and Nvidia.
On Nov. 1, Super Micro handily beat Wall Street's targets for its fiscal first quarter and smashed estimates with its outlook.
Super Micro earned an adjusted $3.43 a share on sales of $2.12 billion in the quarter ended Sept. 30. Analysts polled by FactSet had expected Super Micro earnings of $3.29 a share on sales of $2.11 billion. On a year-over-year basis, Super Micro earnings rose a fraction while sales increased 15%.
SMCI stock boasts a near-perfect 98 IBD Composite Rating — according to IBD Stock Checkup — due to strong long-term fundamentals, along with huge stock price gains since May 2023.
AI Stock Super Micro Breaks Out
On Tuesday, SMCI stock surged more than 7%, breaking out past a 327.55 handle entry. The 5% buy zone goes up to 343.93.
Super Micro will participate at Wednesday's CJS Securities 24th Annual "New Ideas For The New Year" Conference. And shares reversed down 2% in midday trade Wednesday, still holding above their latest entry.
And another entry looms at 357, SMCI's all-time high.
Meanwhile, the relative strength line is at its highest level since August, which is a constructive sign for the AI stock leader, the IBD MarketSmith chart shows. Remember, the RS line measures a stock's price performance vs. the S&P 500 and is the blue line plotted on IBD Charts.
Best Stocks To Buy And Watch
Three recent IBD 50 Growth Stocks To Watch picks are among the best stocks to buy and watch, along with this AI stock.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Royal Caribbean | 112.95 | Cup base | |
| Snowflake | 192.66 | Cup with handle | |
| Microsoft | 366.78 | Cup base |
Source: IBD Data As Of Jan. 10, 2024
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on the best stocks to buy and watch and the stock market.
