Super Micro Computer’s shares (SMCI.O) experienced an impressive surge of nearly 11% before Tuesday’s opening bell following the AI server maker’s stellar quarterly performance and a substantial increase in its full-year revenue forecast, surpassing Wall Street expectations.
The San Jose-based company, with clients including NASA and Japan’s NEC (6701.T), raised its fiscal 2024 revenue forecast range to $14.3 billion to $14.7 billion, up from the previous estimate of $10 billion to $11 billion. Analysts’ estimates averaged $11.51 billion, according to LSEG data.
This upgraded forecast, following an optimistic third-quarter outlook earlier in the month, has propelled Super Micro Computer’s market value by $10 billion, reaching $27.53 billion. The positive momentum has also positively impacted other AI-related companies, with Nvidia, a major AI player, witnessing a 1% rise in shares on Tuesday, and Microsoft (MSFT.O), set to report results after market close, adding 0.8%.
Joshua Mahony, Chief Market Analyst at Scope Markets, highlighted the renewed optimism surrounding the potential size and duration of the ongoing AI boom, suggesting positive outcomes for companies invested in AI technologies. Microsoft’s shareholders, in particular, are hopeful for significant returns given the company’s early investments in AI, with record revenues of $61 billion expected.
Super Micro Computer’s stock has more than tripled since CEO Charles Liang emphasized the company’s significant gains from the generative AI momentum in May of the previous year. Closing at a record high on Monday, the stock was last observed at $548.49, poised to reach a fresh peak at market open.
The third-quarter results reflected a 17% increase in net sales to $3.66 billion from the previous year, along with an adjusted earnings per share (EPS) of $5.59—both surpassing the company’s recent forecast from less than two weeks ago. Analysts had anticipated revenue of $2.87 billion and EPS of $4.55 on average.
Supermicro is currently trading at 24.9 times its earnings estimate for the next 12 months, indicating a lower multiple compared to Nvidia’s 30.5. A lower multiple suggests that the stock is trading at a more favorable valuation in relation to its earnings potential.
