Shares of Super Micro Computer (NASDAQ: SMCI) and Intuit (NASDAQ: INTU) surged 10,740% and 2,220%, respectively, over the last 15 years. That price appreciation qualifies both companies as stock split candidates in 2024. More importantly, it tells investors the companies must be doing something right. That type of outperformance does not happen by accident, and winners tend to keep on winning. Famous investor Peter Lynch once said, "You want to let the winners run."

Here's why Supermicro and Intuit are worthwhile investments whether or not the companies conduct stock splits this year.

Super Micro Computer: The market leader in artificial intelligence servers

Super Micro Computer builds high-performance servers and storage systems for enterprise and cloud data centers. Its products range from individual devices to full rack-scale solutions. The company sources chips, memory, interconnects, and other hardware from suppliers like Intel and AMD, and it has a particularly close relationship with Nvidia.

Supermicro has differentiated itself through modular product development and internal engineering. Specifically, it creates server building blocks that can rapidly be equipped with cutting-edge chips and hardware, and it handles most design and manufacturing in-house. Those qualities often allow Supermicro to bring new products to market before its peers. Indeed, management anticipates being first to market with computing platforms featuring the latest Nvidia Blackwell graphics processing units (GPUs).

Another benefit of modular product development is that the server building blocks can be assembled in countless combinations, such that Supermicro generally offers a broader selection of server and storage products than its peers. Put differently, the company affords its clients more flexibility in designing custom computing solutions.

Supermicro is by no means the leader in the server space. Dell Technologies holds that title. But the company has taken an early lead in the artificial intelligence (AI) server market and is quickly gaining market share. Analysts at KeyBanc estimate that the company will account for 23% of AI server sales by the end of 2024, up from 10% at the beginning of the year.

Supermicro reported strong financial results in the third quarter of fiscal 2024 (ended March 31). Revenue increased 200% to $3.8 billion due to particularly strong demand for GPU-accelerated AI platforms, and non-GAAP (generally accepted accounting principles) net income surged 308% to $6.65 per diluted share. Management also raised its full-year guidance, forecasting revenue to increase 110% at the midpoint, up from 104%.

Going forward, Wall Street expects Supermicro to grow earnings per share at 47% annually over the next three to five years. If we divide that number into its current price-to-earnings ratio of 40.5 times non-GAAP earnings, the result is a very reasonable price/earnings-to-growth (PEG) ratio of 0.9. At that price, I think Supermicro is well positioned to outperform the S&P 500 over the next three to five years.

Intuit: An artificial intelligence-driven expert platform

Intuit is the market leader in U.S. tax preparation (TurboTax) and accounting software (QuickBooks). It also owns personal finance platform Credit Karma and marketing platform Mailchimp. Five years ago, Intuit began redefining itself as an artificial intelligence-driven expert platform and doubled down on expanding its small-business ecosystem with adjacent services, like payroll and payment processing.

Since then, Intuit has launched live versions of TurboTax and QuickBooks, letting users engage with tax and bookkeeping experts. The company has also introduced a generative AI assistant (Intuit Assist) that answers tax questions and makes recommendations in TurboTax, surfaces financial insights in QuickBooks, and helps small businesses optimize marketing campaigns in Mailchimp. When appropriate, Intuit Assist also steers users toward assisted and full-service tax preparation and bookkeeping solutions.

Intuit looked strong in the third quarter of fiscal 2024 (ended April 30), beating expectations on the top and bottom lines. Revenue increased 12% to $6.7 billion, an acceleration from 7% growth in the prior year. That was due to especially good numbers in the small business and self-employed product category, which includes Mailchimp, QuickBooks, and related services. Meanwhile, non-GAAP net income increased 11% to $9.88 per diluted share.

Management also raised its full-year guidance. Revenue is now projected to increase by 13%, up from 11% to 12%, reflecting a more confident outlook across all product categories, especially the small business and self-employed segments. Additionally, non-GAAP earnings per share is projected to increase 17%, up from 12% to 14%.

Going forward, Wall Street expects Intuit to grow earnings per share at 17% annually over the next three to five years. That makes its current valuation of 34.5 times non-GAAP earnings look reasonable. Additionally, shares currently trade at 32.1 times free cash flow, a discount to the three-year average of 37.3 times free cash flow.

Intuit has narrowly lagged the S&P 500 over the last three years, but I think the stock can outperform its current valuation over the next three to five years.

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Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Intuit, and Nvidia. The Motley Fool recommends Intel and recommends the following options: long January 2025 $45 calls on Intel and short August 2024 $35 calls on Intel. The Motley Fool has a disclosure policy.

Possible Stock Splits in 2024: 2 Artificial Intelligence (AI) Stocks Up 2,220% and 10,740% in 15 Years to Buy Now was originally published by The Motley Fool