Wednesday's IBD 50 Stock To Watch pick Super Micro Computer is one of the top stocks to buy and watch in the ongoing stock market uptrend. SMCI stock rose 0.5% Wednesday midday, trading just above the latest buy point.
Super Micro is a storage systems and server manufacturer that specializes in enterprise, cloud, AI and 5G infrastructure. Super Micro is striving to be a "Total IT Solutions" provider, with environmentally friendly and energy-saving servers, AI, storage and IoT switch systems, software and services.
The company's most recent quarterly results came out Jan. 31 and Super Micro stock surged more than 10% after better-than-expected fiscal Q2 earnings and sales. The company earned an adjusted $3.26 a share on revenue of $1.8 billion, for year-over-year increases of 270% and 54%.
Super Micro's IBD Stock Ratings
This tech stock to buy and watch boasts a perfect 99 Earnings Per Share Rating and an SMR Rating of "A," according to IBD Stock Checkup.
Over the last three years, Super Micro has produced average annual earnings growth of 50%, with triple-digit earnings growth the last four quarters. Analysts expect 83% EPS growth for the current year. Sales growth has averaged 26% annually over the last three years. Meanwhile, the company posted a modest 7% pretax margin in fiscal 2022 and a solid 25% return on equity.
Boasting a lofty 98 IBD Composite Rating, out of 99, backed by strong fundamental and technical metrics, Super Micro is the top-ranked stock in the computer hardware industry group, making it one of the top stocks to buy and watch.
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Stocks To Buy And Watch: SMCI Hits Buy Point
Super Micro shares are trying to break out past a 92.90 buy point in a double bottom after strong gains in recent weeks. Shares are just above the buy point and in the 5% buy area that tops out at 97.55. SMCI stock climbed 0.5% midday Wednesday.
In recent weeks, the stock decisively reclaimed its key 50-day line, according to IBD MarketSmith. Meanwhile, the relative strength line is nearing new highs, which is a bullish signal when it happens with a breakout. The RS line measures a stock's price performance vs. the S&P 500.
Given fundamental and technical strength, Super Micro is one of the top stocks to buy and watch in the current market.
Other IBD 50 Stocks To Buy And Watch
These are three recent IBD 50 Stocks To Watch picks.
| Company | Symbol | Buy point | Type of base |
|---|---|---|---|
| Vista Energy | 17.16 | Ascending base | |
| DoubleVerify | 28.99 | Cup with handle | |
| Matador Resources | 69.51 | Cup with handle |
Source: IBD Data As Of Feb. 15, 2023
Follow Scott Lehtonen on Twitter at @IBD_SLehtonen for more on top stocks to buy and watch and the stock market.
