Pullback, shmullback.
Sure, Nvidia's (NVDA -0.36%) share price has retreated somewhat in recent days. But that doesn't negate the fact that the chip stock has soared 154.9% year to date. Nvidia remains a huge winner for investors.
It's not the biggest winner in the S&P 500, though. Meet the one S&P 500 stock that's outperforming Nvidia so far in 2024.
The lone Nvidia beater
Only three stocks in the S&P 500 have delivered gains of 100% or more this year. Nvidia is still ahead of one of them. Vistra's return of 132.2% isn't quite up to Nvidia's level. However, Nvidia is way behind the S&P 500's best-performing stock.
Super Micro Computer's (SMCI -7.98%) shares have skyrocketed 196.6% so far in 2024. Its gain was even more impressive earlier this year. Super Micro stock was up a jaw-dropping 318% year to date in mid-March.
The IT solutions provider isn't just enjoying a great year; it's had a fantastic decade. Ten years ago, Super Micro Computer's market cap was less than $1.2 billion. It reported revenue of $1.16 billion in the previous fiscal year with a profit of only $21.3 million.
Today, Super Micro Computer's market cap tops $49.3 billion. Wall Street expects the company to generate revenue of nearly $15 billion in its fiscal year ending June 30.
What put the "super" in Super Micro Computer this year
Why is Super Micro Computer stock performing so well in 2024? In large part, for the same reason it soared 246% last year: surging demand for servers and storage systems driven by artificial intelligence (AI).
Super Micro's success has gone hand-in-hand with Nvidia's. In its latest quarter, the company saw record demand for its AI rack scale direct liquid cooling (DLC) systems, including those running Nvidia's H100 graphics processing units (GPUs). Super Micro was the first to market development for Nvidia's GH200 (Grace Hopper) and GB200 (Blackwell) platforms.
It also helped that Super Micro Computer was added to the S&P 500 index in March. As a result, all mutual funds and exchange-traded funds (ETFs) that track the S&P 500 had to buy shares of Super Micro.
There has been only one development that has weighed on Super Micro's soaring share price. On March 19, the company announced a public stock offering of 2 million shares. Although it's not surprising that Super Micro took advantage of its tremendous share price gains to raise money, the move diluted the value of existing shares.
Is Super Micro Computer stock still a smart pick?
The AI boom shows no signs of slowing down anytime soon. Nvidia's executives disclosed that the demand for its forthcoming Blackwell GPUs is through the roof -- a great sign for Super Micro.
So is Super Micro Computer stock still a smart pick after its sizzling gains? Valuation could become a problem if the demand for AI systems slows. Cautious investors will probably be better off looking elsewhere.
However, Super Micro's forward earnings multiple around 26 isn't too steep considering the company's growth prospects over the next few years. Aggressive investors with long-term perspectives could still profit from the S&P 500's top stock of 2024 so far.
