Is SMCI ready for stock splits?

Investors familiar with ultra-microcomputers know that the company's business strategy lies in providing high-performance, energy-efficient server solutions to a wide range of industries. The company's products target industries with high computing demands such as cloud computing, artificial intelligence, and big data analysis.

Ultra-microcomputers are known for their flexible response to new developments in the server component market. Due to connections with major industry players, the company can obtain products utilizing the latest CPUs and other advanced technologies ahead of competitors. Furthermore, the company's server solutions are highly customizable, allowing customers to tailor systems to their specific needs.

In order to lead the forefront of the times, super microcomputers have made substantial investments in research and development. In fact, the funds allocated to research and development have accelerated in line with revenue growth, reaching 53.9% ($108.8 million in the year up to December 2023, compared to $70.7 million in the previous year).

Stock splits affect shareholders, so they must exercise their voting rights. Companies can hold a special vote anytime they determine it necessary, but it is common to hold it at the annual general meeting to vote on other items such as the appointment of the board of directors, compensation system, and which accounting firm will perform the audit.

Just because Supermicro's stock price has exceeded $1,000 does not mean that a stock split will be conducted. However, this is a historically high level at which many companies have chosen to split, and investors may soon receive notice of whether a split is inevitable.

The price-to-earnings ratio (pe) is 80.51 times, significantly higher than the industry median of 23.12 times and the 5-year average of 15.77 times. The news of Ultra Microcomputer being added to the s&p500 was announced previously, and many investors and organizations feel that the positive materials have been fully digested.