This stock turned $1,000 into $55,000 in a year
Riding the AI Boom: How This Underdog Stock is Surging
The company…
In the past year, Total Site Solutions (TSSI) stock price has grown by nearly 54x (see Figure 1) by transitioning from being an over-the-counter (OTC) stock to being listed on the NASDAQ stock exchange on November 12, 2024. TSSI helps businesses set up, manage, and maintain their IT systems and infrastructure (servers, data centers, and related hardware). They are a smaller Supermicro that doesn’t manufacture any hardware but focuses on designing, setting up, and managing IT infrastructure and systems for its customers.
Figure 1. TSSI stock price in the past year
Source. Charly AI, Feb 2025
The business model…
Simply put, TSSI is a middleman between IT infrastructure OEMs and their customers. TSSI services are organized into three segments: i) Procurement – purchasing the necessary hardware to build IT systems and infrastructure on behalf of its customers. ii) Facility Management – providing maintenance services for facilities, including modular data center applications. iii) System Integration – integrating IT equipment for OEM vendors and customers, particularly in data center environments, including AI-enabled computing racks.
The financials…
TSSI significant jump in stock price has been driven by a 689% growth in revenue year-over-year in Q3 2024, which generated $7.9 million gross profit (11% gross margin) for the quarter. This growth was due to an increase in federal government procurement services and the integration of AI-enabled computing racks into TSSI services. Procurement is a low-margin (6% in Q3 2024) and seasonal segment, unlike the integration of AI-enabled computing racks services, which has a 45% margin in Q3 2024 (see figure 2).
The addition of AI-related services is due to TSSI recently signing a multi-year agreement with its main customer, Dell. This contract has enabled the company to expand its footprint with a larger factory, thanks to a $20 million credit facility and Dell’s support. TSSI has a strong relationship with Dell, which generates over 90% of its revenue, with its current CEO being a former Vice President of Global Sales and Field Marketing at Dell.
Overall, TSSI has strong financials, with its cash flow from operations increasing by 331% last quarter to reach $37 million, and a debt-to-equity ratio of 0.51. However, TSSI is currently overvalued, with a P/E ratio of 80, which, given the current state of the stock market, is not surprising.
Figure 2. TSSI Revenue, Gross margin, EPS, and EPS Q3 2024
Source. TSSI 10Q, Sep 2025
What Charly AI says…
Overall, Charly AI rates TSSI a BUY broken-down as follow: Financial statements “BUY”, Valuation “Overvalued”, Short-term outlook “HOLD”, and Long-term outlook “BUY”. The “HOLD” on the short-term outlook is explained by the high valuation of TSSI and the volatile nature of the stock.
Figure 3. TSSI Charly AI rating
Source. Charly AI, Feb 2025
My investment thesis…
TSSI footprint expansion, its increase in headcount, and the expected increase in spending on AI infrastructure in 2025 by hyper-scalers (more than $300 billion projected to be spent on AI infrastructure) suggest that TSSI top-line will continue growing. In addition, the company has been working on cost reduction initiatives, which are likely to further improve its margin. Moreover, Supermicro financial issues could work in TSSI's favor, as TSSI may potentially steal some market share.
While the outlook sounds promising, TSSI dependency on Dell is a major issue, as a breakdown in their relationship could send the company into bankruptcy. At the time of writing, TSSI is trading at $14, with a market cap of $330 million. This price is significantly higher than the $9 entry price suggested by Charly AI. I genuinely think that most investors who know about this company are very bullish on it, driving its price up.
If you are bullish, I would suggest acquiring some shares because of the company’s low market capitalization. If you are risk-averse, I would advise buying a few and monitoring the price to buy more when it drops. Personally, I bought some a few days ago, and I’m impatiently waiting to listen to their next earnings call on March 27.
It is worth reiterating the fact that this is a small-cap stock, so you should expect a lot of volatility if you were to invest in it.
Please if you like this piece drop a comment below or reach out directly to me at daniel@askcharly.ai.