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Super Micro Computer (NASDAQ: SMCI) and BigBear.ai (NYSE: BBAI) represent two different ways to invest in the artificial intelligence (AI) market. Super Micro Computer, more commonly known as Supermicro, produces dedicated AI servers. BigBear.ai develops AI modules that can be plugged into edge networks to accelerate and automate certain tasks.
Both stocks are trading far below their all-time highs. Supermicro's stock, which closed at an all-time high of $118.81 on March 13, 2024, has dropped to about $33. BigBear.ai's stock, which closed at a record high of $12.69 on April 13, 2022, trades at less than $3. Let's see why these two AI stocks fizzled out -- and if either one is still worth buying today.
Supermicro controls a much smaller slice of the server market than Hewlett Packard Enterprise or Dell, but it established an early-mover advantage in the dedicated AI server market with its liquid-cooled systems. Its close relationship with Nvidia also provided it with a steady supply of the chipmaker's high-end data center GPUs for processing AI tasks.
Those advantages made Supermicro one of the market's hottest AI stocks. Its revenue grew 46% in fiscal 2022 (which ended in June 2022), 37% in 2023, and 110% in 2024.
But last August, a prolific short seller accused it of inflating its revenues. It subsequently delayed its 10-K filing for fiscal 2024, and it lost its auditor Ernst & Young in October. In November, it received a non-compliance letter from Nasdaq and its financial statements were subpoenaed by the Securities and Exchange Commission and the Department of Justice.
As it faced those daunting challenges, Supermicro's stock sank to a one-and-a-half year low of $18.01 on Nov. 14. However, it bounced back over the following months as it hired a new auditor, finally filed its overdue 10-K, and kept its listing.
Supermicro's revenue more than doubled year over year in the first half of fiscal 2025, and it anticipates 74%-101% growth for the full year as the AI boom continues. From fiscal 2024 to fiscal 2027, analysts expect its revenue and EPS to grow at a compound annual growth rate (CAGR) of 38% and 22%, respectively. Those are explosive growth rates for a stock that trades at just 10 times next year's earnings.
We should take those bullish estimates with a grain of salt -- since higher tariffs will likely throttle Supermicro's near-term sales and squeeze its margins. But it could emerge as a stronger company if it weathers the incoming storm.