Oct 21 (Reuters) – Super Micro Computer jumped over 12% on Wednesday after it forecast quarterly revenue and profit margin comfortably above Wall Street estimates, signaling that AI data center demand remains resilient.
Shares of the AI server maker rose 12.2% to $36.44 in premarket trading.
Here are more details:
• Super Micro forecast first-quarter revenue between $18.5 billion and $19.5 billion, above analysts’ expectations of $15.23 billion, according to data compiled by LSEG
• It now expects profit margins in the range of 12% to 12.5% versus earlier expectations of between 10.4% and 10.8%
• The ongoing scramble to build data centers has largely benefited semiconductor and AI server makers, including Super Micro
• Microsoft, Google, Amazon and Meta are expected to spend more than $700 billion on AI infrastructure this year
• Other server makers Dell and Hewlett Packard Enterprise also gained 5.2% and 4%, respectively before the bell
• “Investors are likely to focus on whether strong performance in core businesses can continue to support elevated AI investment,” said strategists at UBS Global Wealth Management
• The brokerage added that commentary from AI giants on spending, margins and returns will be scrutinized to determine whether the AI capex cycle can be justified
• Markets have lately been concerned about the profitability of data center operators, which have been issuing debt to fund their buildout at a time when borrowing costs are rising
• CoreWeave, a heavily indebted data center operator, was at the center of a selloff last week that also rattled AI-linked stocks
(Reporting by Purvi Agarwal in Bengaluru; Editing by Leroy Leo)
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