Updated January 19th, 2024 at 22:28 IST
Shares of Super Micro Computer jump 25% on AI server demand uptick
The company, which has NASA and Japan’s NEC as customers, saw the share surge as demand for artificial intelligence led to a big forecast raise
AI surge: Super Micro Computer shares surged as much as 25 per cent, registering a first-ever high on Friday after better-than-expectations quarter numbers.
The California-based IT company’s quarter results are well above current estimates on the back of robust demand for servers enabled with artificial intelligence (AI).
Super Micro, whose customers are in the likes of NASA and Japan's NEC, is also betting big on an uptick in demand for its liquid cooling solutions.
This demand comes from data centres that are processing more applications in generative technologies.
In a note, Rosenblatt Securities analyst Hans Mosesmann said, "We speculate that the company's upside is importantly driven by earlier-than-expected hyperscale engagements, that are keen on deploying quickly liquid cooled racks that uniquely falls into Supermicro's area of expertise."
The bullish estimates from Supermicro come after chip company Taiwan Semiconductor Manufacturing Co's upbeat note on AI on Thursday.
The development caused a global rally in chip stocks.
The company stocks closed at $387.90, which will lead to the company on track to add over $4 billion to its market capitalisation, which was $17.3 billion.
Super Micro expects net sales between $3.6 billion and $3.65 billion in the quarter ended December 31, as opposed to its forecast of $2.7 billion to $2.9 billion made before.
The infrastructure company for data centres elevated its adjusted profit expectation to between $5.40 and $5.50 per share, from $4.40 and $4.88 for its second quarter.
Super Micro’s 71 per cent sequential growth easily outpaces the market growth for GenAI, which is estimated around 41 per cent for the December quarter, compared to the September period according to Northland Securities analyst Nehal Chokshi.
The company has seen stocks more than triple since May 2023, after CEO Charles Liang’s statement that the momentum for GenAI has “benefitted the Super Micro greatly."
(With Reuters Inputs)
Published January 19th, 2024 at 22:28 IST