Super Micro (SMCI) jumps on Q2 preliminary earnings

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    Super Micro CEO Charles Liang.

    Source: Supermicro

    Super Micro Computer, one of the best-performing tech stocks of the past few years, soared 36% on Friday to a record, after the maker of data center hardware issued preliminary financial results that exceeded estimates.

    The company said revenue for the fiscal second quarter, which ended Dec. 31, will come in at $3.6 billion to $3.65 billion, well above prior guidance of $2.7 billion to $2.9 billion. Analysts on average were expecting revenue of $3.06 billion, according to LSEG, formerly known as Refinitiv.

    Adjusted earnings will be between $5.40 and $5.55 per share, higher than previous guidance of $4.40 to $4.48 per share.

    The uplifting numbers follow a 246% pop in Super Micro’s stock last year and a jump of 87% in 2022. Since the end of 2018, the stock has climbed almost 30-fold, meaning a $10 million bet on the company five years ago would have resulted in a stake worth almost $300 million today.

    Super Micro manufactures computers and sells them to companies, which use them as servers for websites, data storage and applications such as artificial intelligence algorithms. Analysts at Wedbush Securities said in a note Friday that Super Micro’s sales are “mostly dependent” on Nvidia’s allocation of its graphics processing units, which are at the heart of the AI boom.

    Nvidia’s revenue more than tripled in the third quarter from the prior year due to soaring demand from cloud and internet companies for its GPUs. Analysts are expecting a similar increase for the fourth quarter.

    Based on the midpoint of Super Micro’s guidance range, the 30-year-old company is expecting revenue to have doubled in the December quarter from a year earlier. Super Micro’s full earnings report is scheduled to be released later this month.

    “The magnitude of good news will really depend on the details,” the Wedbush analysts wrote, maintaining a neutral rating on the stock. “We will wait for SMCI’s report and earnings call for additional color before revisiting our forward assumptions and the implications for our company outlook.”

    Super Micro shares rose to $423.36 at Friday’s close and the company’s market cap swelled past $23 billion. Its highest prior close was $353.29 in August of last year.

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