On March 29, 2024, with a trading price of $70,075, and oscillating within a 24-hour range of $68,362 to $71,754, bitcoin’s current market behavior reveals significant consolidation and neutrality. Bitcoin Bitcoin’s 1-hour chart reveals recent volatility, with a significant bounce from a low of approximately $68,362, suggesting a strong support level. Conversely, the resistance near […]
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With the dust settling from Thursday’s upsets, attention shifts to an equally promising lineup of games in the South and Midwest Regions, where teams like Marquette, NC State, Houston, and Duke vie for dominance in their quest for the Final Four. March Madness Delivers Rising Underdogs and Steadfast Favorites Statistically, this tournament has been one […]
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Super Micro Computer (SMCI -1.30%) stock has been pulling back in recent sessions after the company revealed the pricing of its common stock offering, which would dilute existing shareholders. As it turns out, shares of the high-flying server manufacturer are down 19% from their 52-week high, which it hit on March 8.
Savvy investors looking to invest in a top artificial intelligence (AI) stock right now should consider capitalizing on Supermicro’s drop by buying it hand over fist. Here’s why.
Super Micro Computer is offering 2 million shares of its common stock for $875 per share. Moreover, underwriter Goldman Sachs has a 30-day option to purchase an additional 300,000 shares as a part of this offering.
The fact that this announcement came at a time when each Supermicro share was trading at just over $1,000 seems to have dented investor confidence. The company priced the sale at a discount, and the market was quick to press the panic button.
However, a look at the bigger picture will tell us that this is a smart move by Super Micro Computer management because the company aims to raise $1.75 billion in gross proceeds through this exercise. Management adds that the proceeds will be deployed for supporting “its operations, including for purchase of inventory and other working capital needs, manufacturing capacity expansion and increased R&D [research and development] investments.”
The company’s focus on expanding its manufacturing capacity is the right thing to do considering the booming demand for its server solutions that are used for deploying AI chips. On its fiscal 2024 second-quarter earnings conference call, Supermicro pointed out that the utilization rate of its production facilities in the U.S., Taiwan, and the Netherlands was 65%. Management also added that its remaining production capacity was quickly filling up.
Supermicro, therefore, needed to bring new production facilities online to cater to the fast-growing AI server market. Not surprisingly, CEO Charles Liang pointed out on the call:
To address this immediate capacity challenge, we are adding two new production facilities and warehouses near our Silicon Valley HQ, which will be operating in a few months. The new Malaysia facility will focus on expanding our building blocks with lower costs and increased volume, while other new sites will support our annual revenue capacity above $25 billion.
Supermicro is on track to generate $14.5 billion in revenue this fiscal year at the midpoint of its guidance range. That would be more than double the $7.1 billion in revenue it generated in fiscal 2023. Now that the company has already built up a revenue capacity of $25 billion, it would need to bring more capacity online, given how fast the market for AI servers has been growing.
According to Global Market Insights, the AI server market was worth an estimated $38 billion in 2023. By 2032, this market is expected to generate a whopping $177 billion in revenue, for a compound annual growth rate of 18% during the forecast period. Supermicro’s share of AI servers has been improving since it has been growing at a much faster pace than this market.
Considering the lucrative end-market opportunity on offer in the long run, it would make sense for the company to grab a bigger share of this space. This probably explains why management has decided to capitalize on the stock’s terrific surge this year and go for a stock offering to raise more capital. Additionally, Supermicro’s pullback means investors can now buy it at a relatively cheaper valuation.
Supermicro’s earnings and sales multiples have retreated of late.
SMCI PE Ratio data by YCharts.
The stock was trading at more than 90 times earnings at one point this month, while its sales multiple stood at almost 7.5. Some might argue that Supermicro is still expensive as far as its earnings multiple is concerned. However, buying the stock right now is a no-brainer.
SMCI PE Ratio (Forward) data by YCharts.
Supermicro’s forward earnings multiples are significantly lower than the trailing price-to-earnings ratio because of the massive bottom-line growth that the company is predicted to deliver. Analysts expect Supermicro’s earnings to increase a solid 86% in fiscal 2024, followed by a 40% jump in fiscal 2025 to $30.83 per share.
Now that Supermicro is looking to boost capacity through its common stock offering, there’s a good chance it will be able to boost its manufacturing levels and deliver stronger growth, considering the market in which it operates. That’s why savvy investors should consider buying this tech stock as it could regain momentum quickly.
Harsh Chauhan 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.
According to Ricardo Da Ros, CEO of the crypto platform Patex, many crypto users in Latin America (LATAM) seem to prefer using centralized exchanges (CEXs) over decentralized ones. He attributes this preference to a culture in the region that “has been built on trust in authority.” Da Ros suggests that this culture, combined with the […]
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“These interest charges could be astronomical on a big purchase,” says one credit-card expert.
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Here’s an interesting fact about Nov. 8, 2016, that you may already know: It was Election Day. Donald Trump and Hillary Clinton were locked in a race to become the 45th president.
But here’s another fact that you probably don’t know: If you had invested $20,000 in Nvidia stock on that day — and held it until today — you’d be a millionaire.
That’s right, just $20,000 invested in the right time — in the right stock –can set you up for life.
So, with that in mind, let’s take a look at Palantir Technologies (PLTR -6.12%) and see if it has the same potential.
Image source: Getty Images.
Palantir is a leading provider of what is called “big data analytics.” But what does that really mean?
Well, Palantir’s business model reminds me of a famous BASF advertising tagline: “We don’t make many of the products you buy; we make many of the products you buy better.”
In a nutshell, Palantir does the same thing, albeit in a very different way. The company uses AI-powered platforms to monitor and analyze data, with the goal of recognizing patterns and improving processes.
For example, Tampa General Hospital used Palantir’s Foundry platform to reduce patient hold time in its Post-Anesthesia Care Unit by 28% through AI-driven data analysis. In addition, AI analysis of nurse schedules, surgery schedules, and census data has improved operational efficiency. After removing bottlenecks, the hospital’s nurse staffing ratio increased by 30%.
As a result of its ability to drive real-world results, Palantir’s AI platforms are in demand. Revenue increased from $0.9 billion in 2020 to $2.2 billion last year. What’s more, analysts expect the company’s sales to increase to $2.7 billion this year and $3.2 billion in 2025.
Although the majority of Palantir’s revenue is from governmental organizations, such as the U.S. Department of Defense, the National Institutes of Health, and the U.K.’s National Health Services, commercial customers are the future. In its most recent quarter (the three months ended on Dec. 31, 2023), Palantir’s U.S. commercial customer count surged by 55% year over year. Its U.S. commercial revenue jumped 70% to $131 million.
Finally, let’s talk about what is reasonable from a stock perspective. Palantir’s shares currently trade for about $25. So, for a $20,000 investment to grow to $1 million, shares would need to hit a price of about $1,250.
Needless to say, that would take an incredible amount of growth. In compound annual growth rate (CAGR) terms, shares would need to return 47% each year for 10 years.
Over a more reasonable 20 years, Palantir stock would still need a CAGR of almost 22% to turn $20,000 into $1 million.
That might be a bit much to expect despite Palantir’s potential.
Nevertheless, long-term investors shouldn’t overlook the company. Its AI platform could prove to be a real game-changer across numerous industries, and, with time and patience, modest investments in Palantir stock could still add up to big returns.
Jake Lerch has positions in Nvidia. The Motley Fool has positions in and recommends Nvidia and Palantir Technologies. The Motley Fool has a disclosure policy.
Saving for retirement can feel like an uphill battle, especially when you’re juggling day-to-day expenses and trying to keep your head above water.
But BlackRock CEO Larry Fink shares an action that can kick-start your journey: building an emergency fund. In his annual letter to investors, he points out that people with emergency savings are 70% more likely to invest for retirement.
So, if you’re seeking to tackle your daily finances while saving for retirement, here are three tips to kick-start your journey.
Image source: Getty Images.
Fink highlights research that shows 40% of Americans would have trouble coming up with $400 for sudden expenses, such as an urgent car repair. If you’re struggling to manage current expenses, the chances are slim that you’ll be able to tuck away money for retirement.
The good news is that you don’t have to save a lump sum at once. You can beef up your emergency fund over time by saving small amounts from every paycheck. Set up a recurring transfer, say $25, from your checking account to a savings account each payday to get the ball rolling.
If you’re able to increase your savings rate every quarter, you’ll be able to reach your goals faster. As a general rule, you should aim to have at least three to six months worth of bills stashed away in an emergency fund. So, if your essential living expenses total $1,500 each month, you can work toward your first milestone of saving $4,500.
You may be able to stretch your paycheck further by tracking where your money is going.
While you’re probably aware of your fixed monthly costs, like rent or mortgage and car payments, it’s the smaller everyday expenses that can pile up and nibble away at your wallet. Consider tweaking your daily spending habits, such as cutting back on coffee runs or snack purchases, if they don’t add value to your life. You may also be able to unlock potential savings by reassessing your subscription services and negotiating bills.
If trimming your expenses doesn’t move the needle, you might want to tackle income goals, too. See if you can score a raise or bonus at your current job or pick up a side gig that can bring in extra money. Every extra dollar you earn can be funneled into your emergency fund to help you hit your goals faster.
Once you’ve tucked away money in an emergency fund, it becomes easier to focus on long-term savings goals, like retirement. Fink shares that his parents were able to build a sizable nest egg by prioritizing retirement savings and investing.
One way to boost your retirement savings is by taking advantage of employer-sponsored retirement plans like a 401(k). While a traditional 401(k) is often praised for its tax benefits, the cherry on top could be receiving free money from your employer through matching contributions. For instance, if your employer matches dollar-for-dollar up to 6% of your salary and you earn $100,000 annually, setting aside $6,000 in your 401(k) could instantly double your retirement savings with the employer match.
You can also look into individual retirement accounts, which offer greater flexibility compared to a 401(k). If you meet the income limits for contributing to a Roth IRA, you can unlock tax-free income during retirement. With a Roth IRA, you contribute after-tax dollars and have the freedom to invest in your favorite assets, including individual stocks. Additionally, depending on how much income you’re bringing in, you might be able to snag a Saver’s Credit worth up to $2,000 for contributing to a qualified retirement account such as a Roth IRA or 401(k) this year.
If your day-to-day finances have been getting in the way of your retirement savings, you could make a few adjustments this year to turn your financial situation around. Start by beefing up your emergency fund, and then gradually ramp up your retirement savings. The more you sock away for retirement today and plan ahead for your future, the better your odds of living a comfortable retirement.
Share prices of Micron Technology (NASDAQ: MU) took off big time following the company’s fiscal 2024 second-quarter results (for the three months ended Feb. 29), which were released on March 20. The stock rose over 14% in a single session thanks to outstanding growth in revenue and earnings. Micron’s metrics crushed Wall Street expectations, and its guidance was strong enough to confirm the company’s turnaround has finally arrived.
Over the past year, Micron stock is up 93%. Management’s projections for future revenue growth (see below) suggest this stock might just have more upside left in the tank. Let’s look at the numbers and see why investors should consider buying this chipmaker before its next set of elevated revenue projections reach their target dates.
In this most recent quarter, revenue shot up 58% year over year to $5.82 billion. That was well ahead of the $5.35 billion consensus estimate. Even better, Micron swung to an adjusted profit of $0.42 per share from a loss of $1.91 per share in the year-ago period. Analysts were expecting a loss of $0.25 per share last quarter.
A favorable supply-demand balance in the memory-chip market meant that prices headed higher last quarter, allowing Micron to significantly boost its margins. Management said that the prices of dynamic random-access memory (DRAM) shot up in the high teens last quarter, while the price of NAND flash storage chips was up 30%.
All this explains why the company’s adjusted gross margin increased to 20% in the previous quarter as compared to a negative 31.4% in the year-ago period. And an operating margin of 3.5% was a massive improvement compared to the negative 56% in the prior-year period.
CEO Sanjay Mehrotra credited the growing memory demand for artificial intelligence (AI) servers as a key reason behind its turnaround. He said on the latest earnings conference call:
This improvement in market conditions was due to a confluence of factors, including strong [artificial intelligence (AI)] server demand, a healthier demand environment in most end markets, and supply reductions across the industry. AI server demand is driving rapid growth in HBM [high-bandwidth memory], DDR5 [D5] and data center SSDs, which is tightening leading-edge supply availability for DRAM and NAND.
Mehrotra expects memory prices to head higher as the year progresses and forecasts Micron will generate “record revenue and much-improved profitability now in fiscal year 2025.” The company’s outlook for the current quarter turned out to be well ahead of what analysts were expecting.
Micron expects fiscal 2024 third-quarter revenue of $6.6 billion and adjusted earnings of $0.45 per share at the midpoint of its guidance range. Wall Street was looking for just $0.09 per share in earnings on revenue of $6 billion. Year over year, revenue is on track to increase by 76%, which would be a nice improvement over the growth the company posted last quarter.
Micron recorded a loss of $1.19 per share in the same period last year, which means that the recovery in memory prices is all set to give its bottom line a big boost. This helps explain why analysts are raising their bottom-line growth expectations following Micron’s latest report.
Micron stock trades at 6.4 times sales, lower than the U.S. technology sector’s price-to-sales ratio of 7.3. According to consensus estimates, Micron could end the current fiscal year with $24.6 billion in revenue. That would be a 58% jump from last year. And it is expected to sustain an impressive growth rate next year as well.
Assuming Micron does hit $34 billion in revenue in fiscal 2025 and maintains its current price-to-sales ratio, its market cap could jump to $217 billion. That would be a 67% jump from current levels. So investors are getting a good deal on Micron stock right now, making it a good idea to buy it before it soars further following its latest earnings report.
Should you invest $1,000 in Micron Technology right now?
Before you buy stock in Micron Technology, 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 Micron Technology wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
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Harsh Chauhan 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.
1 Incredible Growth Stock to Buy Before Its Market Cap Jumps 67% was originally published by The Motley Fool
Bitcoin Cash (BCH) is experiencing a surge in trading activity and open interest ahead of its second halving event set for April 4, with open interest in futures perpetual contracts reaching a record high of $708 million, an increase from the previous peak in May 2021. The increase in open interest and trading activity is […]
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XRP price is holding gains above the $0.60 zone. The price could gain bearish momentum if there is a close below the $0.570 support zone.
After a steady decline, XRP price found support near the $0.5720 level. A low was formed at $0.5714 and the price started a fresh increase, like Bitcoin and Ethereum.
There was a move above the $0.5880 and $0.600 resistance levels. The price cleared the 23.6% Fib retracement level of the downward wave from the $0.7442 swing high to the $0.5714 low. The bulls pushed the price above the $0.620 resistance zone, but the bears are active near $0.640.
Ripple’s token price is now trading above $0.6320 and the 100 simple moving average (4 hours). On the upside, immediate resistance is near the $0.640 zone. There is also a key bearish trend line forming with resistance near $0.640 on the 4-hour chart of the XRP/USD pair.
The next key resistance is near $0.6580. It is close to the 50% Fib retracement level of the downward wave from the $0.7442 swing high to the $0.5714 low. A close above the $0.6580 resistance zone could spark a strong increase. The next key resistance is near $0.700. If the bulls remain in action above the $0.700 resistance level, there could be a rally toward the $0.7440 resistance. Any more gains might send the price toward the $0.800 resistance.
If XRP fails to clear the $0.640 resistance zone, it could start another decline. Initial support on the downside is near the $0.600 zone.
The next major support is at $0.5720. If there is a downside break and a close below the $0.5720 level, the price might accelerate lower. In the stated case, the price could retest the $0.5250 support zone.
Technical Indicators
4-Hours MACD – The MACD for XRP/USD is now losing pace in the bullish zone.
4-Hours RSI (Relative Strength Index) – The RSI for XRP/USD is now above the 50 level.
Major Support Levels – $0.600, $0.5720, and $0.5250.
Major Resistance Levels – $0.640, $0.6580, and $0.700.
Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.