2 Red-Hot Computer Hardware Stocks To Buy Now

Board, Electronics, Computer, Electrical Engineering

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After experiencing a big sell-off over the past couple of months, tech stocks have been rebounding with renewed investor interest amid the resurgence of COVID-19 cases around the world. But, irrespective of any short-term boost the industry gets from fears of further waves of coronavirus infections, the demand for computer hardware should continue to increase because advanced computing systems are needed to utilize disruptive, new technologies, such as cloud computing, artificial intelligence (AI), and Internet of Things (IoT).

According to a report by Research and Markets, the global communications hardware market is expected to grow to $666.53 billion in 2021 from $625.11 billion in 2020.

Furthermore, the demand for electronics such as personal computers (PCs), smartphones, and smart speakers is expected to increase in the coming months because rapid 5G deployment will require devices compatible with the new networking standard. So, it is wise, we think, to bet now on fundamentally sound hardware stocksSuper Micro Computer, Inc. (SMCI) and Daktronics, Inc. (DAKT).

Super Micro Computer, Inc. (SMCI)

SMCI develops and manufactures high-performance and high-efficiency server and storage solutions based on modular and open architecture. With more than 20 years of hardware design experience, the company provides end-to-end green computing solutions to cloud computing, data center, enterprise information technology (IT), and Internet of Things (IoT)/embedded markets, among other markets. Its products include servers, storage, and networking devices.

SMCI’s net sales declined 4.7% year-over-year to $830.31 million for its fiscal year 2021 second quarter, ended December 31, 2020. However, this represents 8.9% sequential revenue growth driven by increased sales to its international customers. The company’s net income has increased by 16.7% year-over-year to $27.67 million. Also, its non-GAAP EPS increased by 10.5% year-over-year to $0.63.

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