Unstoppable Super Micro: The Dark Horse Aiming for the $1 Trillion Club by 2035

Super Micro Computer (SMCI), a name that may not immediately resonate with the broader investing public, is poised to become a major player in the tech industry. With a market cap of just $53 billion, it might seem ambitious to suggest that SMCI could join the likes of Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta, and Taiwan Semiconductor Manufacturing in the $1 trillion club by 2035. However, the accelerating demand for AI-centric servers and SMCI's decades of expertise in the field make it a dark horse candidate worth watching.


SMCI's strategic partnerships with AI chipmakers like Nvidia, AMD, and Intel have been instrumental in driving its growth. These collaborations enable SMCI to provide highly customizable, energy-efficient, liquid-cooled rack-scale servers designed to handle the rigors of AI and hyperscale data centers. This winning strategy has resulted in triple-digit revenue growth for SMCI, with its fiscal 2024 second quarter revenue surging 103% year over year to $3.7 billion.


SMCI's energy-efficient, liquid-cooled servers play a crucial role in its ability to capture market share in the AI and hyperscale data center sectors. These servers not only provide top performance but also offer energy efficiency and the lowest total cost of ownership in the industry. This combination of customization, performance, and cost-effectiveness has enabled SMCI to grow five times faster than the industry average over the preceding 12 months and increase its market share to 11%.


The accelerating demand for AI-centric servers is a significant tailwind for SMCI's revenue growth and market share expansion. According to BofA analyst Ruplu Bhattacharya, the data center market will grow at a compound annual growth rate (CAGR) of 50% over the next three years, and SMCI's revenue could grow even faster. Nvidia CEO Jensen Huang is equally bullish, suggesting that the installed base of data centers will double to $2 trillion over the coming four to five years. If SMCI captures even a small part of this vast opportunity, the company will soon join the $1 trillion club.

In conclusion, Super Micro Computer is an unstoppable force in the AI server market, with a strong track record of growth and strategic partnerships with leading AI chipmakers. As the demand for AI-centric servers continues to accelerate, SMCI is well-positioned to capture market share and potentially join the ranks of the world's most valuable companies by 2035. Investors should keep a close eye on this dark horse candidate as it races towards the $1 trillion club.