Photo by İsmail Enes Ayhan on Unsplash
Super Micro’s Soaring Stock Bolstered by Strong AI Demand
January 30, 2024
Super Micro Computer, a server selling company, saw an impressive surge in its stock of nearly 10%, setting a new record high in after-hours trading on Monday. This comes on the heels of a strong AI-driven rally, as the firm anticipates its quarterly sales to outperform expectations.
The good news wasn’t confined to Super Micro alone. Nvidia, the largest chipmaker globally, enjoyed a 1.2% jump in its shares after the closing bell, adding onto the already positive 2.3% gain during Monday’s trade. For investors, it was another reason to celebrate as Nvidia’s stock closed at an all-time high.
Super Micro, with its clientele that boasts giants like NASA and Japan’s NEC, saw its shares trading at $542, “adding to a 4.5% increase during Monday’s session,” according to Reuters.
Considering the numbers, Super Micro anticipates its net sales for the upcoming March quarter to land somewhere between $3.7 billion and $4.1 billion. Even the lower end of this spectrum surpasses the average of $2.87 billion that analysts have estimated, as indicated by LSEG.
Super Micro’s stock also made headlines on Jan. 19 with a 35% upsurge. This massive jump sparked Wall Street’s rally in AI-related companies, all thanks to Super Micro’s December-quarter results that far exceeded estimates. The robust demand for AI servers was the key catalyst behind this substantial upswing.
Since May 2023, Super Micro’s value has swelled over three times. Its CEO, Charles Liang, credited this rise to the company’s successful harnessing of AI momentum.
Super Micro’s sales boom can be attributed to major cloud service providers investing in generative AI systems, with the company having strong associations with AI chip providers such as Advanced Micro Devices, Intel, and Nvidia. Looking further ahead, the company has also revised its fiscal year sales expectations ending June 30 from the initial $10-$11 billion to a staggering $14.3-$14.7 billion. This reassessment, with a midpoint of $14.5 billion, substantially outstrips Wall Street’s previous estimation of $11.3 billion. In its last fiscal year, Super Micro reported sales of $7.1 billion.
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