--- title: "Why You’ll Want to Get on This “Brown Bag” Buy… Quickly" description: "The article discusses a compelling investment opportunity in a leading AI technology company, which is currently undervalued despite strong financial performance. The company, competing with Nvidia, h" type: "news" locale: "en" url: "https://longbridge.com/en/news/238796839.md" published_at: "2025-05-05T21:15:00.000Z" --- # Why You’ll Want to Get on This “Brown Bag” Buy… Quickly > The article discusses a compelling investment opportunity in a leading AI technology company, which is currently undervalued despite strong financial performance. The company, competing with Nvidia, has seen significant growth in its data center division, which now accounts for half of its revenue. With a price-to-earnings ratio 20% below the Nasdaq Composite, it presents a "brown bag" buy. The company has also partnered with xAI, co-founded by Elon Musk, to support the world's largest supercomputer, enhancing its position in the AI market. Hello, Reader. If there’s one thing that we Americans appreciate, it’s a good deal. According to data gathered by Capital One’s Shopping Research updated in December 2024… - 94% of Americans redeem at least one discount each year. - Over 80% of U.S. consumers sign up for email offers specifically to receive discounts. - And 67% of U.S. consumers have made a purchase they weren’t planning on after being offered a discount. Today is a perfect example. Many restaurants are offering deals on food and drinks in celebration of Cinco de Mayo, a day that marks an important battle in Mexico’s conflict against the French. Although I don’t have any deals on delicious dishes to share with you today, I have found a deal on a company that has become a major player in many facets of AI technologies. But shares of this company could skyrocket starting as soon as *tomorrow*, so I wanted to share a little bit about this company today. Let’s take a look… This company is a leading supplier of cutting-edge computer processors… and one of my recommendations at ***Fry’s Investment Report***. Generally speaking, business is booming, but the company’s share price is not. It is trading for about 19 times estimated adjusted 2025 earnings, which is about 20% below the valuation of the Nasdaq Composite index. This disconnect is creating a great investment opportunity. This company has been so successful at generating strong profit growth, and at expanding its market share in key markets, that it has become what I call a “brown bag” buy. If we pulled a brown bag over its logo, so that we did not know the company’s identity, nor had any idea what products it produces, the company’s raw financial performance would strongly tempt us to buy the stock. This “brown bag” buy competes directly against **Nvidia Corp. (**NVDA**)** in an industry that is brutally competitive and deeply cyclical. Because of factors like these, investors have been dumping the stock for months, despite the company’s superb operating performance and bulletproof balance sheet. The company’s core operations are making rapid gains, especially its fledgling data center division. This critical division is growing at a blistering pace. Last year, its revenues nearly doubled and accounted for half of total company revenue. The data center division is just one of this company’s four main business segments, broken down as follows… 1. **Data Center –** Provides data center customers with server-class CPUs, GPUs, and related computing platforms. 2. **Client –** Provides CPUs, APUs, and chipsets to the companies that build desktops and notebooks for both the consumer and enterprise markets 3. **Gaming –** Focuses on designing and developing computer processors and graphics technologies for PC, handheld, and console gaming devices 4. **Embedded –** Provides CPUs, GPUs, and other processing solutions that become embedded in a vast range of products and applications like consumer electronics, automotive, industrial automation, healthcare, and telecommunications The company’s GPU’s are a cost-effective alternative to Nvidia’s market-leading H100 and H200 GPUs. As of December 2024, the company had shipped more than 300,000 of its professional GPUs designed for AI and high-performance computing applications to Meta Platforms Inc. (**META**), Microsoft Corp. (**MSFT**), and Oracle Corp. (**ORCL**). It also inked a fascinating forward-looking deal late last year: It teamed up with Nvidia as strategic investors in funding round for xAI. Here’s where the opportunity lies… The artificial intelligence firm co-founded by Elon Musk – xAI – has been operating a supercomputer in Memphis, Tennessee, since September 2024. It is the world’s largest supercomputer, and it currently has 100,000 graphics processing units (GPUs). Back in December 2024, xAI laid out plans for expansion that will allow the supercomputer to hold at least 1 *million* GPUs. For comparison, the fastest operational supercomputer as of June 2024, called Frontier, only had 37,888 GPUs. GPUs allow supercomputers – or any AI technology – to, simply put, achieve faster overall processing. So, the more GPUs, the quicker a supercomputer can process data and perform computational calculations. And so, “Colossus” is now widely considered the world’s largest and fastest AI supercomputer, and what xAI calls “the most powerful AI training system yet.” This is paramount in the AI race, as a superintelligent AI computer could power all sorts of autonomous robots, discover the cure for many deadly diseases, find new, unlimited clean sources of energy, make breakthrough scientific discoveries… the list goes on. So, this company has gained a seat at the table of what could become a multidimensional AI powerhouse. As I said, the clock is ticking on this deal: The company is hosting a conference call with Wall Street analysts *tomorrow*… where they could give an update on this Elon Musk project and the next generation of AI. Additionally, analysts expect about a 50% year-over-year earnings per share increase, and about a 30% year-over-year revenue increase. And despite 2025 headwinds, the company has beaten consensus estimates in seven out of the last nine quarters. So, the time to get in on this one-stop AI play is *now.* You can learn all about this company, beyond just its name and ticker symbol, at ***Fry’s Investment Report***. **Click here to access all of the details.** Now, let’s look at what we covered here at ***Smart Money*** this past week… ## ***Smart Money* Roundup** ### **Why Stocks Are Soaring – and Why May 7 Could Change Everything** Trade-war headlines are whipping the market back and forth. Fear of tech slowdowns are freezing would-be buyers. Record cash piles are sitting idle while volatility rattles Wall Street. Most investors feel trapped, wondering whether the next big move is another crash. That may sound scary… but what we’re seeing are the fingerprints of a bottom, not a collapse. My InvestorPlace colleague Luke Lango shares why **we’ve just seen what may be the clearest “buy” signal we’ve seen in years…** ### **Two Ways to Prepare for the Great Retail Squeeze – Before May 7 Hits** In February 2020, photos began circulating of deserted locations in China. Today, similar images of desolation are coming toward our shores. But instead of empty subway stations and malls, it’s store shelvesthat will be barren… that’s because America is quietly running out of Chinese goods. My colleague Tom Yeung takes a look at **what the continued trade war with China means for us as consumers… and, importantly, as investors.** ## **The Mag 7’s Earnings Are in… and so Is the Tech Reset** Beyond President Trump’s 100 days, last week also brought earnings reports from four of the “Magnificent Seven” tech stocks… the popular companies that I believe are primed for an impending crash. So, I’ll break down the Mag 7’s latest earnings reports – **and the tech reset that I see coming**. ### **3 Reasons Why the Market Could Blossom in May** April didn’t bring the kind of market performance we’ve come to expect. Instead of historical gains, investors were met with headwinds: tariff battles, inflation concerns, and political uncertainty. But just like the saying goes, April showers bring May flowers. And my colleague Louis Navellier is digging into **the signs of life already sprouting beneath the surface.** ## **Looking Ahead** This week, I’ll continue to dive deeper into big-picture trends that continue to shape my investment outlook… especially against the ongoing market volatility and uncertainty. And for my paid-up members, stay tuned: Your *Fry’s Investment Report* May issue will be available on Friday. So, be sure to keep an eye out on your inbox. **To learn how to join me at *Fry’s Investment Report* before the issue becomes available, simply click here.** Regards, Eric Fry ### Related Stocks - [AI.US - C3.AI](https://longbridge.com/en/quote/AI.US.md) - [NVDA.US - NVIDIA](https://longbridge.com/en/quote/NVDA.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 甲骨文的最悲观假设：若 AI 数据中心合同全部终止 | 伯恩斯坦极端压力测试显示，即便 OpenAI 等 AI 客户完全撤单，甲骨文仅凭核心数据库与企业云业务仍可支撑每股 137 美元估值，较当前股价下行空间仅 15%，安全边际清晰。研报同时拆解市场担忧：2480 亿美元租赁合同年度风险敞口仅 | [Link](https://longbridge.com/en/news/275745631.md) | | 反超三星、利润率盖过台积电：SK 海力士是如何问鼎 AI 存储领域 “隐形霸主” 的？ | SK 海力士过去 12 个月市值飙升 340%，已从债权人控制的 “僵尸公司” 逆袭为 AI 产业链定价者。其凭借 HBM 先发优势，在 AI 需求爆发的浪潮下，深度绑定英伟达与微软，拿下全球过半 HBM 份额；市占率超越三星，利润率超越台 | [Link](https://longbridge.com/en/news/275576275.md) | | OpenClaw 之父爆猛料：Meta 和 OpenAI 跪着抢人，小扎亲自求收购 | 在一场重磅播客访谈中，OpenClaw 之父 Peter Steinberger 透露，Meta 的扎克伯格和 OpenAI 的 Sam Altman 都在积极拉拢他，甚至扎克伯格亲自表示对 OpenClaw 的赞赏。两大科技巨头同时争抢人 | [Link](https://longbridge.com/en/news/275962731.md) | | 软件股遭遇 2010 年来最大做空潮，高盛惊呼：市场 “无处可藏”！ | 十年最猛烈做空潮席卷美国软件股，摩根士丹利数据显示空头规模创 2010 年以来新高，市场陷入 “先卖后问” 的恐慌。AI 取代白领的担忧引发行业震荡，防御性板块加速跑赢，科技七巨头（Mag 7）亦显颓势。高盛交易主管 Callahan 表示 | [Link](https://longbridge.com/en/news/275859482.md) | | 马斯克的 “新大饼”：月球基地 | 马斯克以 “月球基地 Alpha” 新叙事替代火星计划，拟在月球制造并发射 AI 卫星以突破算力瓶颈。此举旨在整合 SpaceX 发射能力与 xAI 算力需求，打造差异化估值，虽技术壁垒极高，但为合并实体注入增长想象。 | [Link](https://longbridge.com/en/news/275864051.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.