Super Micro Computer (NASDAQ: SMCI) stock is rocketing higher Wednesday in response to multiple positive catalysts. The company's share price was up 10.2% as of 2:45 p.m. ET. At the same point in the session, the S&P 500 had risen 1.8%, and the Nasdaq Composite was up 2.9%.

Supermicro's valuation is climbing today thanks to a combination of encouraging developments on the macroeconomic front. The stock is also seeing bullish momentum in conjunction with the announcement of a new server and expanded generative artificial intelligence (AI) partnership with Fujitsu.

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Stocks rise as investors bet on brightening macroeconomic picture

Recent comments from President Donald Trump and other leaders in the administration point to a significant pivot in trade policy that could help lower tariffs and alleviate concerns among investors. According to a report from Reuters, the administration could lower tariffs on Chinese goods to between 50% and 65% -- a big pullback from the 145% import tax currently applied to most goods from the country. In comments today, Trump also said that he didn't intend to try to fire Federal Reserve Chair Jerome Powell.

Supermicro unveils new server and deepened Fujitsu partnership

Fujitsu published a press release today announcing that it was expanding its collaboration with Supermicro. The two companies also announced the launch of the new PRIMERGY GX2570 M8s server from Supermicro, which pairs a high-performance graphics processing unit (GPU) with liquid-cooling technologies and related support software and services. In July, Fujitsu will begin using the new server in conjunction with its Takane large language model (LLM) to provide generative AI services to enterprises. The development suggests that Supermicro should continue to see strong demand for its server products tied to generative AI and helps support a bullish case for the stock.

Should you invest $1,000 in Super Micro Computer right now?

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The hot artificial intelligence sector propelled many tech stocks upward in the past couple of years, among them server manufacturer Super Micro Computer (NASDAQ: SMCI), commonly known as Supermicro. Its shares soared to a split-adjusted 52-week high of $101.40 last June.

But a series of bad news battered the stock. Shares plummeted to a 52-week low of $17.25 by November. Since then, the company has put this tumultuous period behind it, and its share price has risen.

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Even so, the stock is down 66% over the past 12 months through April 17. Does this mean its shares are buying up? Or do reasons remain to steer clear? Let's dig into the company to find out.

Super Micro Computer's turbulent times

Supermicro's stock price drop this past year began in earnest when now-defunct short-seller Hindenburg Research accused the company of accounting manipulation in August. Then, management delayed filing its annual earnings report for the 2024 fiscal year, ended June 30. This was followed by its auditor resigning after raising concerns about the company's financial reporting.

As each of these dominoes fell, so did Supermicro's share price. The company risked having its stock delisted at that point, which already had happened once before, in 2018.

Management steadily addressed the issues. It gained a new auditor, accounting firm BDO. In December, a special committee investigating Supermicro's finances confirmed that the company's statements were accurate. In February, the company finally filed its annual report, along with two subsequent quarterly earnings statements.

With its challenges behind it, here's how Supermicro's business fared. In fiscal 2024, sales surged an impressive 110% over the prior year to $15 billion. The growth was due to Supermicro's server and data storage solutions, which were popular products to meet the hardware demands of AI systems. They contributed 95% of 2024 revenue.

After a successful fiscal 2024, that success extended into the first half of the company's 2025 fiscal year, ended Dec. 31. Revenue rose 100% once again to $11.6 billion, up from the previous year's $5.8 billion.

Super Micro Computer's era of growth

Supermicro's splendid sales gains enabled the company to end the first half of fiscal 2025 with net income of $744.9 million, up from $453 million in the prior year. As a result, diluted earnings per share (EPS) rose to $1.17 from $0.79 in the period.

The company's outstanding results so far in fiscal 2025 are a continuation of a multiyear stretch of sales and EPS growth. This period kicked off when businesses began investing in generative AI around the time OpenAI's ChatGPT debuted in 2022.

Data by YCharts; TTM = trailing 12 months..

However, Supermicro's streak of success is encountering a bump in the road. The company forecast fiscal 2025's full-year revenue to come in between $23.5 billion to $25 billion. While that's still significant double-digit growth over fiscal 2024's $15 billion, it's not the outsize sales jump seen in the last fiscal year.

The reason is that it can't keep up with customer demand. CEO Charles Liang said, "While most key components are ramping at full speed, it will take some time to fulfill our current AI solution backlogs."

The company has a new factory in Malaysia, but it will take time to get up to full capacity. As a result, Supermicro delivered a conservative revenue estimate for fiscal 2025.

Evaluating whether to buy Super Micro Computer stock

Supermicro's backlog is good news for investors focused on the long haul. As the company builds up more capacity to churn out products, it will be positioned to see increased sales growth.

In the short term, however, its shares are seeing a depressed valuation. Here's a look at Supermicro's price-to-earnings ratio (P/E), a way to tell how much investors are willing to pay for a dollar's worth of earnings.

Data by YCharts; PE = price to earnings..

Supermicro's P/E spiked in February after the company filed earnings reports that showed strong results. Since then, recent stock market volatility amid President Donald Trump's tariff plans have pushed down Supermicro's stock valuation.

Although it's not at the lowest point reached during the company's recent controversy, at the time of this writing, Supermicro's P/E ratio is lower than before the troubles began, suggesting shares are at an attractive price.

This, combined with strong sales and EPS growth and the prospect of future revenue expansion as it increases output, makes Supermicro a worthwhile long-term investment in my view. The compelling valuation, in particular, means now could be a good time to pick up shares.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $532,771!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $593,970!*

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See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Robert Izquierdo has positions in Super Micro Computer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Despite the extreme stock market volatility at the start of 2025, the artificial intelligence (AI) revolution is moving full steam ahead. Advances in machine learning and automation technology are rapidly reshaping the global economy, ushering in a new era of business productivity and human creativity.

At the core of this transformation are high-performance data centers, which play a critical role in the AI ecosystem. Two leading companies in this space are Super Micro Computer (NASDAQ: SMCI) and Dell Technologies (NYSE: DELL), which supply the essential server equipment and storage hardware to run AI workloads.

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Let's discuss whether Supermicro (as it is commonly known) or Dell Technologies is the better AI stock to buy right now.

Image source: Getty Images.

The case for Supermicro

Supermicro presents a remarkable growth story as an early winner in the AI boom. Even with the stock down 66% from its 52-week high at the time of writing, longtime shareholders have still enjoyed a 1,470% return over the past five years.

The company capitalizes on the demand for specialized rack-scale computer systems, which integrate power, storage, cooling, and software components to support graphics processing unit (GPU)-based AI chips from Nvidia and Advanced Micro Devices. Its technical leadership in next-generation direct-liquid cooling (DLC) technology is a key advantage, offering significant energy-efficiency gains for power-intensive data centers. Additionally, the company's U.S. manufacturing presence has become increasingly important amid trade tensions as businesses seek to secure their supply chains.

Supermicro expects revenue to reach $23.5 billion to $25.0 billion in fiscal 2025, a 62% year-over-year increase. Looking ahead, the company sees a path to $40 billion in revenue by next year, driven by growing market adoption of its DLC technology and expanding production capacity. This momentum is accompanied by improving profitability, with Wall Street analysts predicting a 17% increase in adjusted earnings per share (EPS) this year to $2.59.

On the other hand, Supermicro's success has not been without challenges. In 2024, the company faced a headline-making accounting investigation by the U.S. Department of Justice (DOJ) while its auditor resigned due to governance concerns. Favorably, the company has since cleared up some of those issues, releasing an audited 2024 annual report, while an independent special committee cleared it of misconduct allegations. Uncertainties remain, including possible DOJ sanctions, yet the attraction of Supermicro now as an investment is in this comeback story.

Investors who believe Supermicro's growth trajectory is back on track have plenty of reasons to buy shares of this AI leader.

The case for Dell Technologies

Dell Technologies' strength lies in its diversification. Generating $96 billion in revenue in fiscal 2025 (ended Jan. 31), the company is 4 times larger than Supermicro. It benefits from a broad product portfolio across enterprise-grade solutions and a consumer devices franchise.

This year, its AI-optimized server systems powering data centers have driven record earnings. For the last reported fiscal 2025, revenue increased 8% year over year, with adjusted EPS rising 10% to $8.14. Notably, the AI servers and networking segment revenue grew 54% annually, nearly matching Supermicro's momentum.

While sluggish personal computer demand has weighed on Dell's firmwide results, this segment could have a silver lining. Dell's strategic emphasis on AI-powered PCs for businesses and consumers positions it to leverage an anticipated industry-wide replacement cycle for AI-ready devices into the next decade.

Perhaps the strongest case for Dell as the better AI stock over Supermicro is its valuation. Shares trade at a forward price-to-earnings (P/E) ratio of 9.2, a steep discount to Supermicro's earnings multiple of 14.3. One interpretation is that Dell stock is undervalued, with shareholders also receiving a 2.1% dividend yield supported by its high-quality free cash flow.

Data by YCharts. PE Ratio = price-to-earnings ratio.

A tough decision between two industry leaders

I'll give Supermicro the edge as the better AI stock based on its more specialized focus on AI infrastructure hardware and leadership in liquid cooling solutions. While the stock is riskier than Dell's, its stronger growth outlook may offer more upside potential if it can overcome regulatory uncertainties. If investors recognize that the delicate macroeconomic environment is a risk to consider, Supermicro stock is a great option for investors to capture tech and AI exposure in a diversified portfolio.

Should you invest $1,000 in Super Micro Computer right now?

Before you buy stock in Super Micro Computer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Super Micro Computer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $495,226!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $679,900!*

Now, it’s worth noting Stock Advisor’s total average return is 796% — a market-crushing outperformance compared to 155% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 10, 2025

Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices and Nvidia. The Motley Fool has a disclosure policy.