Super Micro sees quarterly revenue soaring on AI server boom

Oct 20 : Super Micro Computer expects quarterly revenue and profit margin well above Wall Street estimates as it benefits from relentless AI data center demand, the server maker said on Tuesday, sending shares 11.3 per cent higher in after-hours trading.

Rivals Dell and HPE gained between 3.5 per cent and 4.9 per cent. Nvidia, the AI chip giant, was up 1.5 per cent.

Big Tech's race to build out data centers has placed firms such as Super Micro among the biggest beneficiaries of the AI boom. Microsoft, Google, Amazon and Meta are expected to spend more than $700 billion on AI infrastructure this year.

That is showing up in Super Micro's results.

FORECAST FOLLOWS AI SELLOFF

Shares of companies exposed to the AI data-center buildout fell last week after CoreWeave’s stock and bond slide and prospects of higher interest rates triggered concerns that heavily indebted operators could take longer than expected to generate returns.

S&P Global said on Monday it estimates the world's biggest tech firms are likely to have more AI-linked liabilities than known.

Super Micro on Tuesday said it expects revenue between $18.5 billion and $19.5 billion in the first quarter, compared with analysts’ average estimate of $15.23 billion, according to data compiled by LSEG. That expectation is also well above the company’s prior revenue forecast of $14.5 billion to $15.5 billion.

The server maker also now expects gross margins to be in the range of 12 per cent to 12.5 per cent versus the prior expectation of 10.4 per cent to 10.8 per cent, and above analysts' estimate of 10.15 per cent, primarily due to customer and product mix.

Super Micro last week appointed former Western Digital executive Mark Long as its chief financial officer, nearly two years after beginning its search amid scrutiny of its financial and accounting practices.