Outside of artificial intelligence chip manufacturers NVIDIAThe best AI trade of the last 12 months was also a lesser known company called Super-microcomputer (NASDAQ:SMCI) share.

SMCI’s revenue and net profit doubled in the last fiscal year, driven by demand for all types of sophisticated server hardware and equipment as major technology companies vie to handle large AI workloads.

SMCI’s share price has risen more than 90% since the beginning of 2024, and forward-looking tailwinds could further fuel the share price increase.

SMCI shares have long-term potential

Super Micro Computer has delivered excellent results throughout the year. The company began 2024 with record results in the second quarter of fiscal 2024, which ended December 31.

Revenue increased 103.2% from $1.8 billion to $3.7 billion. Net income also increased 68% from $176.2 million in the previous fiscal year to $295.9 million. SMCI’s third-quarter results underscored demand for the data center hardware provider’s products.

Revenue rose more than 200% to $3.8 billion from the $1.3 billion SMCI stock delivered in the same quarter last fiscal year.

However, the demand for liquid-cooled servers was both a blessing and a curse for the company.

Companies building data centers are looking to save energy due to the power-intensive nature of AI servers.

Nevertheless, demand for AI server hardware has never been stronger and despite short-term margin losses, the long-term opportunities for SMCI remain intact.

Wall Street’s concerns about AI spending are overblown

Any market observer is probably aware of the significant sell-off that began in August. Investors are starting to take a close look at major technology companies’ investments in artificial intelligence.

alphabetFor example, delivered a solid earnings report, although advertising revenue at the company’s YouTube division fell short of expectations. However, investors were more concerned about the company’s $13.2 billion in capital spending, which was well above analyst estimates.

The point is that stock investors and traders are wondering when all this spending will pay off, and Alphabet isn’t the only tech company under scrutiny like this. Nvidia has also taken a major hit due to concerns about AI “hype.”

Personally, I think these big tech companies will probably continue to invest a lot of money in AI hardware because they see it as the next big breakthrough and are preparing for the future.

As mentioned above, server hardware provider SMCI is also not seeing a significant decline in demand. This means that despite the AI ​​defeat, companies like SMCI are likely to remain an attractive investment opportunity in the long term.

SMCI’s valuation remains attractive

What makes Super Micro Computer such an attractive investment is its valuation. The company’s share price rose more than 246% in 2023 and has nearly doubled year-to-date.

Despite these big gains, SMCI is trading at just 15.8 times forward earnings. When you compare that to other AI stocks, like NVIDIA or AMD or Palantir the difference is astonishing.

For the full fiscal year 2024, Super Micro Computer’s revenue more than doubled, increasing 109% year-on-year.

According to Koyfin, Wall Street analysts expect revenue to grow 78% in fiscal 2025. This means SMCI’s growth story remains intact and the company’s valuation remains in a favorable position that is difficult to ignore, especially for value investors.

At the time of publication, Tyrik Torres did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s disclosure policies.

At the time of publication, the editor in charge did not hold any positions (either directly or indirectly) in the securities mentioned in this article.