Super Micro Computer, Almonty Industries, Nel ASA - Which shares still have potential?

Super Micro Computer - Growth prospects and challenges in the AI sector

Super Micro Computer, a leading provider of Artificial Intelligence (AI) rack server solutions, has positioned itself as a significant player in the technology and AI sector. The Company benefits greatly from its partnership with Nvidia, the top dog in AI technology. Despite the challenges in the market, Nvidia was able to present impressive quarterly figures again this year, which indicates a continued robust demand for AI technologies. Nvidia even expects a supply constraint until 2025 due to the high demand. This close collaboration offers Super Micro a unique position to grow further in the AI sector.

Despite positive market positioning and partnerships, Super Micro has struggled to maintain its pace of growth recently. This is particularly notable as Nvidia has reached record highs in share price. Dell and other competitors are stepping up their efforts in the AI space, increasing the pressure on Super Micro. Nvidia has recently pointed to its close collaboration with Dell to promote the use of AI solutions in various industries. This could lead to Super Micro facing greater challenges in implementing its growth strategies. Super Micro is looking to scale quickly through its modular approach.

In particular, the Company sees great potential in the area of liquid cooling. By June, Super Micro plans to deliver 2,000 direct liquid cooling racks per month and expects liquid cooling to grow significantly over the next 12 to 18 months. At the same time, the Company is investing in the development of "sovereign AI" to tap into growth markets in Europe, the Middle East and Africa. However, Super Micro also faces the challenge of securing its margins while gaining market share. This could affect profitability in the short term. The share has recently moved back up from around USD 700 and is currently trading at around USD 902.

Almonty - Secure tungsten supply

The situation on the tungsten market remains tense: Over 90% of global tungsten production comes from China and Russia, leading to massive dependence. Now that the US is threatening to impose punitive tariffs on electric vehicles, tensions could rise again. Due to its hardness and heat resistance, tungsten is considered indispensable in aviation, automotive, and telecommunications technology. Demand will increase if tungsten becomes established in battery technology. Almonty Industries promises to significantly reduce its dependence by reactivating its Sangdong mine in South Korea and aims to start production by the end of this year.

At full capacity, this mine could provide almost 10% of the world's tungsten supply and offer a transparent and fairly produced source of tungsten. An important asset for the Company is the geographical location of the projects, which are located in South Korea, Spain and Portugal. The Panasqueira mine in Portugal achieved a positive EBITDA in the first quarter and is currently being expanded. A delegation from the US Department of Commerce has already visited the site and emphasized the importance of the tungsten supply. The importance of tungsten cannot be underestimated, especially since the price of the metal has risen considerably in recent years.

This is also due to the increased demand from the defense industry. The Company has the potential to expand its market share considerably, particularly outside the dominant producing countries. It is estimated to hold around 33% market share outside China and Russia. Offtake agreements have already been signed for the Sangdong mine, guaranteeing revenue of at least USD 580 million. Additionally, there is a molybdenum deposit on the Sangdong property. There is a lot of potential, especially as Almonty is pressing ahead with the restructuring of its debt, with short-term liabilities already having been successfully restructured. The share price has risen by over 35% since the beginning of the year and is currently trading at CAD 0.71.

Nel ASA - Strategic partnership

Hydrogen technology is increasingly recognized as a forward-looking solution to global energy and climate challenges. Due to its ability to efficiently store and transport renewable energy, it offers significant benefits for the decarbonization of various industries. Hydrogen can be used as a clean fuel for power generation, industrial processes, and the transportation sector. Renewable hydrogen solutions contribute significantly to the reduction of greenhouse gas emissions and are, therefore, both environmentally and economically attractive.

Nel ASA's share price has risen sharply in recent days, triggered by a new technology license agreement with Reliance Industries Limited (RIL). This agreement authorizes RIL to produce Nel's alkaline electrolysers in India and use them worldwide for its own consumption. In addition, both companies have committed to working together to improve the performance and cost optimization of the electrolysis technology. Håkon Volldal, CEO of Nel, described the cooperation as a significant milestone and emphasized RIL's ambitions in the field of renewable hydrogen. Financial details of the agreement were not disclosed.

The market reaction to the announcement of the partnership was positive, resulting in a significant increase in the Nel ASA share price. Analysts, including Yoann Charenton from Bernstein, have confirmed their "Outperform" rating on the share with a target price of 6.75 Norwegian kroner. Charenton emphasized that the first rounds of hydrogen auctions in Europe provide valuable information on future pricing. Based on the news, the share is currently trading at NOK 8.272, which is already above the analyst's price target. This means that the Company is again valued at more than EUR 1 billion, which is very ambitious.

All three companies presented still have a lot of potential. Super Micro Computer is well positioned to benefit from the rising demand for artificial intelligence but faces challenges from competitors such as Dell. Almonty Industries shows great potential to reduce dependence on Chinese and Russian tungsten and is on track to start operations at its Sangdong mine in South Korea. Nel ASA has established a strong foundation for future growth in hydrogen technology through the strategic partnership with Reliance Industries and the positive market response to this news.