Supermicro (NASDAQ: $SMCI) Stock Surges 10% On Robust AI-Powered Earnings Growth

Super Micro Computer (NASDAQ: $SMCI) is an American IT company that produces high-performance servers. It also offers various industries’ server management software and storage solutions, including cloud computing, 5G, AI, and edge computing.

Super Micro Computer stock surged by 10.5% during after-hours trading on Monday, January 29, 2024. The surge came after the company released positive Q2 fiscal 2024 numbers and an upbeat guidance.

Supermicro Surpasses Q3 Estimates On Strong AI Servers Demand

The recent market positive turn in SMCI stock is mainly due to Super Micro issuing third-quarter guidance that surpasses Wall Street estimates. They have significantly raised their projected revenue guidance for fiscal year 2024. The significant increase is driven by strong market demand for Super Micro’s optimized servers for AI.

Supermicro’s second-quarter positive results were not unexpected, as the company had previously released preliminary revenue and earnings projections on January 18. These figures exceeded Wall Street expectations, leading to a 36% share surge the next day.

The company initially projected quarterly sales of $3.6 billion to $3.65 billion with an adjusted EPS of $5.40 to $5.55. This guidance, which they have exceeded, was a massive increase from the prior guidance of sales of $2.7 billion to $2.9 billion with an adjusted EPS of $4.40 to $4.88.

In H124, Super Micro incurred $325 million in operation expenses, compared to $475 million last year. They concluded the quarter with $726 million in cash and cash equivalents and a total debt of $376 million.

CEO Charles Liang commented on the Q2 earnings release: “We continued to demonstrate our market leadership in fiscal Q2 2024, reporting record revenue results of $3.66B [and] year-over-year growth of 103%. While we continue to win new partners, our current end customers continue to demand more [of] Supermicro’s optimized AI computer platforms and rack-scale Total IT [information technology] Solutions. As our innovative solutions continue to gain market share, we are raising our fiscal year 2024 revenue outlook to $14.3 billion to $14.7 billion.”

Super Micro Guidance for Q3

The company has the following guidance for the third quarter, ending on March 31, 2024:

• Revenue increased from $3.7 billion to $4.1 billion, a growth of 189% to 220% Y/Y.
• Adjusted earnings per share (EPS) of $5.20 to $6.01, reflecting a year-over-year increase of 219% to 269%.

The guidance has surpassed Wall Street’s estimate for Q3 revenue of $2.87 billion and an EPS of $4.55.

Super Microcomputer has delivered excellent quarterly guidance. Their current robust growth is primarily due to rising use of AI by companies and other entities.

Stock Update: $SMCI

$SMCI is currently trading at $517.90, with a gain of 4.49% as of 02:47PM in New York on January 30, 2024. At the time of writing, the market cap is $29.021 billion, with a volume of 15,954,206. The stock has surged by 81.38% since the beginning of 2024. In the past 12 months, the stock’s price has risen by 617.80%.

Should you Invest in $SMCI?

SMCI stock has experienced a massive surge in the past few weeks. In the past month, the stock is up 79.91%. The company is focused on AI innovation and related technologies, which are powering growth. The stock is worth holding based on its recent performance and guidance figures.

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