See the top S&P 500 stock outperforming Nvidia so far in 2024

Withdrawal, retreat.

Of course, NvidiaIt is (NVDA 6.76%) the stock price has fallen somewhat in recent days. But that doesn’t take away from the fact that the chip stock is up 154.9% year to date. Nvidia remains a big winner for investors.

It’s not the biggest winner of the S&P500, However. See which S&P 500 stock is outperforming Nvidia so far in 2024.

The only Nvidia beater

Only three S&P 500 stocks have generated gains of 100% or more this year. Nvidia is still ahead of one of them. VistraThe 132.2% yield isn’t quite up to par with Nvidia’s. However, Nvidia is far behind the best performing stock in the S&P 500.

Super microcomputer‘s (SMCI 1.95%) Shares have soared 196.6% so far in 2024. Its gain was even more impressive earlier this year. Super Micro stock was up 318% year to date as of mid-March.

The IT solutions provider is not only enjoying a great year; we’ve had a fantastic decade. Ten years ago, Super Micro Computer’s market capitalization was less than $1.2 billion. It reported revenue of $1.16 billion in the previous financial year, with a profit of just $21.3 million.

Today, Super Micro Computer’s market capitalization exceeds $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, it’s for the same reason it soared 246% last year: growing demand for servers and storage systems driven by artificial intelligence (AI).

Super Micro’s success goes hand in hand with that of Nvidia. During its most recent 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 with development for Nvidia’s GH200 (Grace Hopper) and GB200 (Blackwell) platforms.

The addition of Super Micro Computer to the S&P 500 Index in March also helped. 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 was only one development that weighed on Super Micro’s soaring stock price. On March 19, the company announced a public stock offering of 2 million shares. While it is not surprising that Super Micro took advantage of its huge share price gains to raise funds, the move diluted the value of existing shares.

Is Super Micro Computer stock still a smart choice?

The AI ​​boom shows no signs of slowing down anytime soon. Nvidia executives have revealed that demand for its upcoming Blackwell GPUs is exploding – a good sign for Super Micro.

So, is Super Micro Computer stock still a smart choice after its runaway gains? Valuation could become an issue if demand for AI systems slows. Cautious investors are probably better off looking elsewhere.

However, Super Micro’s forward earnings multiple, around 26, is not too high considering the company’s growth prospects over the next few years. Aggressive investors with long-term outlooks could still profit from the S&P 500’s best stock in 2024 so far.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool Ranks and Recommends Nvidia. The Motley Fool has a disclosure policy.