By Super Micro Computer Inc. is set to exceed its original forecasts for the latest quarter by a significant margin, which has led to a remarkable surge in its stock price.
Shares of Super Micro (SMCI), a leading chip company specializing in storage and server offerings, are on track to achieve a record close in Friday’s session. The stock is currently trading at $421.27, surpassing its previous record finish of $353.29 in early August.
Not only is the stock anticipated to set a new record for its closing price, but it is also expected to achieve its highest single-day percentage increase ever at 35.4%. The stock needs to gain over 31.2% to accomplish this milestone.
The trading volume for Super Micro is also nearing record levels, with 21.5 million shares changing hands by the end of the trading day. The previous record, set on August 22, 2018, was 22.4 million shares.
This surge in the stock price follows Super Micro’s announcement of preliminary results for the December quarter, indicating that revenue is expected to exceed the midpoint of the company’s initial forecast by at least $800 million, or approximately 30%.
Super Micro’s Success in the AI Market
According to Rosenblatt analyst Hans Mosesmann, Super Micro has experienced significant upside in their business. This growth can be attributed to various factors such as the increasing adoption of AI/acceleration, a larger allocation of resources for their Hopper product, recovery in general purpose server platforms, expansion into hyperscale projects, and increased engagement in liquid cooling solutions.
Super Micro, an Nvidia partner, has seen a boost that goes beyond Nvidia’s incremental allocation within the quarter. Instead, the growth seems to be driven by the company’s success in securing greater allocation from hyperscale customers.
One particular offering from Super Micro that has gained traction among customers is their liquid-cooling option. Given the power requirements of servers running AI applications, liquid cooling has become essential. In fact, Mosesmann reveals that up to 20% of the market in the cloud is now opting for liquid-cooled solutions provided by Super Micro.
In light of these developments, Mosesmann predicts that Super Micro could capture a significant portion of the market worth approximately $80 billion. When combined with Lisa Su’s $400 billion target for the industry by 2027, Super Micro’s potential in the liquid-cooled AI compute hardware sector is truly impressive.
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