I’m a WSB long-time lurker. I’ve noticed that as soon as a particular stock gets mentioned in this forum, its value starts to soar wildly. For instance, over the last few months, ACHR, JOBY, LUNR, RKLB, and even RDDT have been mentioned, and they have all shot up like crazy after prominent posts from this forum. And I really believe that the stock is mentioned first here and then starts to soar, rather than the other way around. As a Boglehead, I’ve restrained myself from making bets in any of these companies, which I sincerely regret.

Are there any studies on the Reddit effect in the market?

What’s the next big mover that I’ll miss out on?

In-Depth Investigation of Supermicro (SMCI): Financial Analysis, Future Scenarios, and AI Market Potential

I’ve spent hours gathering, analyzing, and organizing all the information to present it here for you. I hope it brings clarity to the complexities surrounding Supermicro. As always, everything here represents my personal opinion and is not financial advice or a recommendation.

Quick Overview

SMCI: Navigating Opportunities and Challenges

• Potential Share Price: $35–$100, depending on scenarios.
• Future Market Cap: $20–$60 billion.
• AI Market: Expected growth of 10%-15% annually through 2027.
• Key Question: Will SMCI seize the AI opportunity, or will financial challenges weigh it down?

Investigation Steps

1. Reviewing Reports and Analyzing the Data

I reviewed SMCI's annual and quarterly financial reports. Key highlights include:

• Inventory: A sharp increase of 3x within one year (from $1.45 billion to $4.41 billion).
• Cash Flow Discrepancy: High revenue with significant negative cash flow of $2.48 billion in 2024.
• Related Party Transactions: Deals with suppliers owned by the CEO's family raised concerns about potential manipulation.
• Delayed Financial Filings: Delays in submitting financial reports raise questions about transparency.

2. Defining Scenarios and Probabilities

I estimated the likelihood of each scenario based on the company’s history, current market conditions, and financial data:

• All Allegations Are True: 15%-20%, considering past accounting issues.
• Some Allegations Are True: 40%-50%, indicating minor but not severe problems.
• No Allegations Are True: 30%-35%, given SMCI’s strong market position and AI growth prospects.

3. Industry Context and Comparisons

SMCI operates in a highly competitive AI infrastructure market, where leaders like NVIDIA, HP, and Dell play critical roles. Unlike competitors focused on broader markets, SMCI is carving a niche in AI-specific solutions, such as liquid cooling and custom server technology.

Scenario Analysis: Data and Outcomes

Scenario 1: All Allegations Are True

• Adjusted Revenue: $12.5–$13.3 billion.
• Adjusted Net Income: $1.03–$1.09 billion.
• Market Cap: $20–$24 billion.
• Share Price: $35–$40.

Scenario 2: Some Allegations Are True

• Adjusted Revenue: $13.5–$14 billion.
• Adjusted Net Income: $1.1–$1.15 billion.
• Market Cap: $23–$27 billion.
• Share Price: $40–$45.

Scenario 3: No Allegations Are True

• Revenue: $14.94 billion.
• Net Income: $1.21 billion.
• Market Cap: $25–$35 billion.
• Share Price: $42–$55.

Future Outlook for the AI Market: 3 Levels of Optimism

Why SMCI May Succeed

1. Competitive Advantage: Liquid cooling and AI-optimized servers give SMCI an edge.
2. AI Market Growth: The AI market is expected to surpass $1 trillion by 2027.
3. Strategic Positioning: SMCI’s focus on scalable, high-performance hardware uniquely positions it for large-scale AI adoption.

Future Valuation Estimates

1. Conservative: $50 billion market cap, $80 share price.
2. Moderate: $56 billion market cap, $90 share price.
3. Optimistic: $60 billion market cap, $100 share price.

Visual Insights

1. Scenario Comparison by Market Cap

This chart highlights SMCI’s potential market cap across different scenarios, showcasing conservative, moderate, and optimistic projections.

https://preview.redd.it/kpylh567m44e1.png?width=2000&format=png&auto=webp&s=9a3c1cf5ad63904a75c488049b5e1fe092366e65

2. AI Market Growth Forecast

https://preview.redd.it/nz0zea43m44e1.png?width=2000&format=png&auto=webp&s=4e4dec8ea0799541825c1aab9ba11b850507cbca

This chart illustrates the rapid growth of the AI market from 2023 to 2027, emphasizing the enormous opportunity for companies like SMCI.

Key Industry Comparisons

Frequently Asked Questions (FAQ)

Q: "How were the percentage adjustments determined?"
A: The analysis relied on accounting trends, cash flow gaps, and historical issues with the company.

Q: "Why did you choose a P/E ratio of 20-25?"
A: This is a conservative multiplier suitable for tech companies in competitive, high-growth markets.

Q: "What makes SMCI different from competitors?"
A: SMCI focuses on hardware solutions specifically tailored for AI workloads, including liquid cooling and high-performance servers.

Key Takeaways

• SMCI has significant growth potential in the AI infrastructure market, provided it addresses transparency concerns.
• Challenges include: inventory management, cash flow issues, and related-party transactions.
• Market cap projections range from $20 billion to $60 billion, with share prices between $35 and $100 depending on performance.
• The AI market is expected to grow rapidly, offering a lucrative opportunity for companies like SMCI.

Summary and Insights

Important Disclaimer

⚠️ This post is not financial advice and should not be taken as an investment recommendation.
Readers are encouraged to perform their own research before making any investment decisions.

• This is not financial advice and is solely my personal opinion.
• I’m sharing my thoughts, and everyone should do their own research before making any investment decisions.
• This post is not intended to manipulate the stock price, just to share my journey and analysis.

Disclosure

I used ChatGPT to organize all my analysis and create the graphs.

What do you think? Will SMCI dominate the AI market, or is this too risky? Let’s discuss! 🚀

IBKR

Swiss Bank

Robinhood’s new Legend upgrade was incredibly instrumental in tracking the trends and hit them at as close to the high as possible.

Who was shorting regional banks based on their exposure to commercial real estate (CRE) risk. With all the talk about the potential fallout from the CRE sector over the past few years, I’m curious to know who took the plunge and shorted these banks earlier in 2023 or 2024?

Did it work as expected? Any surprises, like a stronger-than-anticipated rebound in bank performance, or did CRE exposure finally start to eat away at their balance sheets?

What’s the outlook on this trade? Do you think the worst of the CRE fallout is yet to come, or is the market pricing in the potential for a prolonged slump? Will regional banks be in for more pain, or do we start seeing a normalization as the economy adjusts?

Sold all my shares @8.38 to cover my costs so I’m covered even if it dumps but I’m gonna ride it out. Depending on news may possibly exercise contracts

Take a look at how I turned my initial $2,000 investment in options for ACHR into $19,000. All done in a week.
Best part about is that I let the options expire in the money and they all came to my account this morning.
I now own 5,200 shares!

https://preview.redd.it/x6j6pn0nl14e1.jpg?width=1532&format=pjpg&auto=webp&s=a8cc3b02d164b2b797a1f15c3aa059e7c03f8874

Open to any thoughts or ideas—there’s a lot I don’t know about these two companies, and I don’t have much money to invest, but I do enjoy following the markets.

Won’t SpaceX be the go-to for both of these sectors, launch services and cellular communications? It’s difficult to imagine the US wanting to branch out very much from a known quantity, now that the next POTUS has been chosen and he arrives with a prepackaged Leon.

Another way to ask the same question: Now that SpaceX has powerful support from the White House (I assume), what can ASTS or RKLB provide that SpaceX can’t, or can’t develop?

Positions: 31 shares of SPXL. Not invested in either of these companies directly.

I’ve had my fair share of joy and depression with mining stocks but No matter how high BTC goes, $MARA decays because of halving and its effect on mining.

I feel like $RIOT and $MARA are the options of bitcoin. If BTC goes down a bit this goes to the gutter. But it can also 2x when BTC receives a little hype. And if it trades sideways, well, I present to you theta(not really) and the stock drops. Mining stocks are like BTC but with ED and bipolarism, if you understand what I mean.

Considering that BTC might calm down and trade sideways at these levels and after so much hype, what do you guys think about puts on this in a few days to try and capitalize on the non-existant theta i mentioned.

Regard out.

As a brand new investor, I spent November learning options, which means I’m one of the few regards who lost money during the biggest bull run, but ya’ll came thru to break me even and enjoy the rest of the run at a safer pace. You guys fuckin rock

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Pulled out right before the election, clearly.

Is a bull market in tech stocks coming?

https://finance.yahoo.com/video/tech-sector-rebounds-nvidia-alphabet-152644388.html

My previous post is below:

https://www.reddit.com/r/wallstreetbets/comments/1h1likf/app_sp_inclusion_december_6th_168k_degenerate_bet/

$APP inclusion incoming Friday Dec 6th. This play is an easy layup.

Position - 70 contracts for Dec 27th expiration / APP $330 calls

https://preview.redd.it/763qdp7izv3e1.png?width=974&format=png&auto=webp&s=854fedf65d09798ebc2545816734ed2de05430f4