Latest news with #techStocks
Wall Street Journal
12 hours ago
- Business
- Wall Street Journal
Australia Stock Futures Hint at Chance of a Record
2220 GMT – Australia's S&P/ASX 200 is set to open higher after major U.S. indices finished just short of records. ASX futures are up by 0.6% ahead of Friday's session, suggesting that the benchmark index could set a record of its own. The ASX 200 slipped 0.1% on Thursday but is still less than 0.5% away from the record close it set a little over two weeks ago. Ahead of the open, Suncorp said its chairman will step down at September's annual general meeting. On Wall Street, strength in tech stocks left the S&P 500 and Nasdaq Composite close to records. The S&P gained 0.8%, the Nasdaq rose 1.0%, and the DJIA added 0.9%. (
Yahoo
24-05-2025
- Business
- Yahoo
This AI Stock Is Still Off 62% From All-Time Highs: Should You Buy?
Super Micro Computer's stock has recovered from the lows but is still down 62% from highs. The company's revenue is growing quickly, but profit margins are falling. With the potential of a cyclical downturn in semiconductors and AI, there is a lot of risk with Super Micro Computer stock. 10 stocks we like better than Super Micro Computer › Super Micro Computer (NASDAQ: SMCI) has been in the doghouse on Wall Street, but the tide may finally be turning. After falling close to 90% from all-time highs the stock has bumped off the lows and is now up over 50% in the past month. The artificial intelligence (AI) beneficiary that builds computer racks for data centers operates in a rapidly changing sector, leading to wild swings in its stock price. It doesn't help that its profit margins keep moving in the wrong direction, either. As of this writing, Super Micro Computer stock is still down 62% from all-time highs. Let's see whether this AI beneficiary is a cheap buy for your portfolio at current prices. AI has supercharged growth for anything related to the advanced semiconductor and data center market in the past few years. Super Micro Computer serves a niche connecting these two fields by buying advanced computer chips and building computer racks ready-built to handle immense AI workloads. With technologies and innovations like liquid cooling systems, Super Micro Computer has been able to win customers by having these systems ready for deployment with high efficiency when it comes to things like electricity and air conditioning spend, which are important for data center deployment. Last quarter, Super Micro Computer's revenue grew to $4.6 billion compared to $3.85 billion in the year-ago period. This was "only" 19% revenue growth but comes on top of 200% revenue growth in the same quarter a year ago. Super Micro Computer has gone from a tiny player in the computer rack assembly space to expectations for $21.8 billion to $22.6 billion in revenue this fiscal year ending in June. That is a lot of revenue. One issue is holding up Super Micro Computer though: its deteriorating profit margins. A few years ago, Super Micro Computer's gross profit margin was closing in on 20%. Over the last 12 months, this has fallen to 11.27%, which shows the company's inability to raise prices on its customers buying data center products. Conversely, it shows that the power in the relationship sits with Super Micro Computer supplier Nvidia, which has consistently raised prices on its AI computer chips. As a middleman, the company is struggling to capture much of the value of the AI semiconductor and data center supply chain. Explosive growth makes Super Micro Computer look attractive. Investors need to understand it operates in a cyclical sector -- semiconductors, data centers, and AI -- that goes through big up and down swings. AI spending has been in an upswing for years now but could easily head into a downturn if large technology players and the cloud players meet demand with enough supply. In fact, we may be already seeing that occur with Super Micro Computer's gross profit margin. Margin compression is a sign that an industry is getting more supply to match demand, which can eventually lead to oversupply and a down cycle. It may not occur in 2025, but a down cycle will eventually hit the semiconductor market again as it has every decade since its inception. Investors also cannot forget about the short report posted last year by now retired short-seller Hindenburg Research alleging potential accounting fraud at Super Micro Computer. It is unclear today whether Hindenburg Research was correct in its analysis of Super Micro Computer, but the short report presents another risk for the stock. Perhaps management is not being honest with Wall Street. If you just looked at Super Micro Computer's earnings ratio, you might think the stock is cheap. It has a trailing price-to-earnings ratio (P/E) of 23.6, which looks like a bargain considering how fast Super Micro Computer has been able to grow its revenue. Remember the sliding gross profit margin? This has led to falling bottom-line profits for the company in the last few quarters. Operating income was $145 million last quarter, which was less than half of what Super Micro Computer earned a year ago even though revenue was higher this quarter compared to 2024. Combined with the potential for a cyclical downturn, Super Micro Computer stock does not look as cheap as its current P/E ratio suggests. The hard truth about this stock is that it is incredibly risky. There is a lot of upside potential if the company can keep growing revenue and regain its prior profit margin levels. But there is a ton of downside potential if industry spending dries up. Avoid buying Super Micro Computer stock because of these downside risks. Before you buy stock in Super Micro Computer, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 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 $640,662!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $814,127!* Now, it's worth noting Stock Advisor's total average return is 963% — a market-crushing outperformance compared to 168% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Brett Schafer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy. This AI Stock Is Still Off 62% From All-Time Highs: Should You Buy? was originally published by The Motley Fool
Yahoo
08-05-2025
- Automotive
- Yahoo
NXP Semiconductors (NasdaqGS:NXPI) Unveils Powerful S32R47 Radar Processors for Autonomous Driving
NXP Semiconductors has recently introduced its S32R47 imaging radar processors, enhancing its standing in the autonomous driving sector. This product release, aligned with broader market gains marked by increased optimism around US-UK trade deals, coincides with a notable 14% rise in the company's stock over the past month. Despite mixed earnings and executive changes, the market's bullish sentiment, particularly in response to easing trade restrictions benefiting tech stocks, seems to have supported this upward movement. The innovations in radar technology likely reinforced investor confidence amidst broader economic developments. We've identified 1 possible red flag for NXP Semiconductors that you should be aware of. The end of cancer? These 23 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's. The recent introduction of NXP Semiconductors' S32R47 imaging radar processors aligns with broader positive market sentiment, supporting investor optimism. This innovation potentially enhances NXP's positioning in the autonomous driving sector, possibly contributing to future revenue growth by offsetting challenges in global automotive production. In the longer-term context, NXP's total return has been 118% over five years. Despite recent share price movements, which show a 14% rise due to easing trade restrictions and product innovation, the company underperformed both the US Semiconductor industry and broader US market over the past year. Analysts project NXP's revenue and earnings growth to continue, with revenues expected to increase annually by 5.9% over the next three years and earnings projected to reach $3.3 billion by 2028. These forecasts are contingent on market conditions and execution, particularly regarding acquisitions like Kinara, which aim to boost AI edge computing capabilities. Current valuation insights indicate that while the share price is trading at approximately 22% below the consensus price target of $234.07, there is considerable analyst disagreement. This variability reflects uncertainties related to macroeconomic factors and market performance relative to industry peers. Gain insights into NXP Semiconductors' outlook and expected performance with our report on the company's earnings estimates. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include NasdaqGS:NXPI. Have feedback on this article? Concerned about the content? with us directly. Alternatively, email editorial-team@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
