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Super Micro Computer Shares Surge 25% to Record High on Strong AI Server Demand

 |  January 19, 2024

Shares of Super Micro Computer experienced a remarkable surge of approximately 25% to reach a record high on Friday. The surge was fueled by the company’s optimistic projection of quarterly results, which exceeded current estimates, driven by robust demand for artificial intelligence (AI) servers.

Super Micro Computer has become a key player in the rapidly evolving AI industry, with its cutting-edge liquid cooling solutions gaining traction in data centers processing generative AI applications. The company’s stock rally is attributed to a rising need for its liquid cooling expertise, as data centers seek efficient solutions to handle the increasing demand for AI processing power.

Rosenblatt Securities analyst Hans Mosesmann highlighted the significance of Supermicro’s success, stating, “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 positive outlook from Super Micro Computer follows a bullish note on AI from chipmaker Taiwan Semiconductor Manufacturing on Thursday, which ignited a global rally in chip stocks. Supermicro’s client base includes esteemed organizations such as NASA and Japan’s NEC.

As of the last close, Super Micro Computer boasts a market capitalization of $17.3 billion. With the recent surge in its stock price to $387.90, the company is poised to add more than $4 billion to its market value.

Super Micro Computer now anticipates net sales in the range of $3.6 billion to $3.65 billion for the quarter ending December 31, surpassing its previous forecast of $2.7 billion to $2.9 billion. The impressive quarterly results are indicative of the company’s ability to capitalize on the growing demand for AI infrastructure, particularly in the hyperscale sector.

Investors and industry observers are closely watching Super Micro Computer’s performance as it navigates the dynamic landscape of AI technology and data center solutions. The company’s success reflects the broader trend of increasing reliance on advanced computing solutions in various sectors, further propelling the growth of the tech industry.

Source: Reuters