Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>In the latest Q3 2024, the Super Micro Computer management shared about its ongoing growth and mentioned that the strong results reflect the increasing demand for their rack-scale plug and play total ai solutions.</li><li>For the quarter, the firm achieved record-breaking revenues of $3.85 billion, a year-on-year increase of 200% and non-GAAP earnings per share of $6.65, a 308% YoY increase.</li><li>Super Micro anticipates AI growth over many quarters, if not years, based on its financial performance and market trends, which is positive for the firm.</li></ul>

In the latest Q3 2024, the Super Micro Computer management shared about its ongoing growth and mentioned that the strong results reflect the increasing demand for their rack-scale plug and play total ai solutions.For the quarter, the firm achieved record-breaking revenues of $3.85 billion, a year-on-year increase of 200% and non-GAAP earnings per share of $6.65, a 308% YoY increase.Super Micro anticipates AI growth over many quarters, if not years, based on its financial performance and market trends, which is positive for the firm.

Super Micro Computer Inc.: Role of AI and Green Computing in Market Leadership! - Major Drivers

Equity Long-Short, Semiconductors, Fabricated Knowledge

Douglas O'Laughlin

Equity Long-Short, Semiconductors

Fabricated Knowledge

Learn more about the world's most important manufactured product. Meaningful insight, timely analysis, and an occasional investment idea.

<ul><li>I want to talk about Supermicro. The stock has gone parabolic; some say it’s emblematic of the coming Semiconductor and AI bubble.</li><li>I think it is to a certain extent, but I want to point out a particular aspect that has been happening.</li><li>Given the high volume of options expiring today, I believe there is an ongoing gamma squeeze. It created huge buying pressure that has led to today. This was the run-up until Thursday.</li></ul>

I want to talk about Supermicro. The stock has gone parabolic; some say it’s emblematic of the coming Semiconductor and AI bubble.I think it is to a certain extent, but I want to point out a particular aspect that has been happening.Given the high volume of options expiring today, I believe there is an ongoing gamma squeeze. It created huge buying pressure that has led to today. This was the run-up until Thursday.

<ul><li>This is our first report on one of the fastest growing high-performance server and storage solutions providers, Super Micro Computer Inc.</li><li>The company reported a record-breaking fiscal second quarter performance for 2024, with a revenue of $3.66 billion and an earnings per share of $5.59, marking a 103% increase from last year.</li><li>This is the first time the company has crossed the $3 billion mark in quarterly revenue, which surpassed even the total annual revenue collected in 2021.</li></ul>

This is our first report on one of the fastest growing high-performance server and storage solutions providers, Super Micro Computer Inc.The company reported a record-breaking fiscal second quarter performance for 2024, with a revenue of $3.66 billion and an earnings per share of $5.59, marking a 103% increase from last year.This is the first time the company has crossed the $3 billion mark in quarterly revenue, which surpassed even the total annual revenue collected in 2021.

Super Micro Computer: Initiation of Coverage - Unlocking the Power of AI with Green Computing – Why Investors Can't Afford to Miss Out!  - Major Drivers

Asia and Global Semiconductor and Tech Research

Andrew Lu

<ul>
<li>Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.</li>
<li>TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.</li>
<li>We attribute Nvidia customers' sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.</li>
</ul>


Post 35% price gain in a quarter, many good news we expected and other analysts expected already factored into the share price. We believe the risk/reward not attractive here.
TSMC guides stronger 1Q24 and 2024, helped by Nvidia and copy cat AI GPU/ASIC orders. We see greater opportunities for alternative copy cat solutions like AMD and Alchip.
We attribute Nvidia customers' sales discrepancy to AI server is cannibalizing non-AI server and Nvidia is allocating more GPUs to premium price paying customers in 1H24 and reverse in 2H24.


From Nvidia Results to See Supply Chain Stories?

Thematic (Sector/Industry)

<ul>
<li>After our global server market model update, we see 3Q23 server market decline and data center vendors' capex cut not consistent with Nvidia's robust y/y sales growth of over 200%;</li>
<li>Discrepancy: 1. Nvidia gaining value on AI server, losing zero on non AI; 2. AI servers grow at the expenses of non AI; 3. most vendors not only in server;</li>
<li>Different from  consensus view, we expect general (non AI) server market to decline 16% y/y in 2024 and 29% in 2025 and suggest to avoid general server supply chain vendors.</li>
</ul>


After our global server market model update, we see 3Q23 server market decline and data center vendors' capex cut not consistent with Nvidia's robust y/y sales growth of over 200%;
Discrepancy: 1. Nvidia gaining value on AI server, losing zero on non AI; 2. AI servers grow at the expenses of non AI; 3. most vendors not only in server;
Different from  consensus view, we expect general (non AI) server market to decline 16% y/y in 2024 and 29% in 2025 and suggest to avoid general server supply chain vendors.


What to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025?

United States

Super Micro Computer, Inc. designs, develops, manufactures and sells server solutions based on modular and open-standard x86 architecture. The Company's products include servers, motherboards, chassis, and accessories.

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Super Micro Computer (SMCI US)

Super Micro Computer Inc.: Role of AI and Green Computing in Market Leadership! - Major Drivers

In the latest Q3 2024, the Super Micro Computer management shared about its ongoing growth and mentioned that the strong results reflect the...

Baptista Research

WTF Is Going on at SuperMicro? (SMCI)

Given the high volume of options expiring today, I believe there is an ongoing gamma squeeze. It created huge buying pressure that has led to today.

Fabricated Knowledge

Super Micro Computer: Initiation of Coverage - Unlocking the Power of AI with Green Computing – Why Investors Can't Afford to Miss Out! - Major Drivers

This is our first report on one of the fastest growing high-performance server and storage solutions providers, Super Micro Computer Inc. The...

Baptista Research

From Nvidia Results to See Supply Chain Stories?

From Nvidia Results to See Supply Chain Stories? Post 35% price gain in a quarter, many good news already factored into the share price. We...

Andrew Lu

What to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025?

Names to Avoid if AI Server Will Continue to Squeeze General Server Market in 2024-2025? Different from consensus, we expect non AI server market...

Andrew Lu

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