Trader J's Inner Circle Message Board

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Strategies & Market Trends : Trader J's Inner Circle

NVDA 199.04

+5.7%

3:59 PM EST

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From: Trader J	5/1/2024 11:18:32 AM
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SMCI: After looking through earnings, it seems like a really good quarter and it leaves me with a "no idea" as to whether they can keep it up. 2024 fiscal year expected P/E based on the guide is in a range of 31-33, which is rather positive in my estimation. I haven't seen 2025 estimates yet. Margins ticked up to 15.6% from 15.5%. Was hoping to see a bit more in this area but they are obviously trying to win share. The big question in my mind stems from this number and their ability to eventually ramp margin ... or draw it in as competition picks up. All in all, it's a staggeringly good quarter from where this company was a year ago but there's no way to be super comfortable with their moat from my point of view. This isn't Nvidia where they are designing GPUs that are in high demand ... but instead, they play in the buildout of these farms and centers based on the growth of AI. That's not to say they can't continue to perform, but I'd say their P/E isn't aggressive based on the fear or concern that they could/can keep up this performance. Sure seems that the bloom is off the rose at this point. They didn't announce a split and investors are pulling in their horns in all things AI. That's not unhealthy but what has gone before may not be what lies ahead in this niche.

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