Today’s Change
Current Price
Super Micro Computer, (SMCI +24.38%) which develops and sells modular AI server and storage solutions closed Wednesday at $34.65, up 24.51%. The stock moved higher after fiscal Q3 results showed an earnings beat, improving margins, and strong AI data center demand. Investors are watching management’s above-consensus revenue outlook and AI infrastructure growth narrative next.
Trading volume reached 125.4 million shares, coming in about 228% higher than its three-month average of 38.2 million shares. Super Micro Computer IPO’d in 2007 and has grown 3,855% since going public.
How the markets moved today
The S&P 500 (^GSPC +1.46%) gained 1.46% to finish Wednesday at 7,365, its first close above 7,300. The Nasdaq Composite (^IXIC +2.02%) advanced 2.02% to close at 25,839. Within computer hardware, industry peers Dell Technologies (DELL +10.49%) closed at $238.81 (+10.40%) and Hewlett Packard Enterprise (HPE +1.10%) finished at $30.37 (+1.10%) as investors reassessed AI server demand.
What this means for investors
Super Micro’s earnings report was a relief for investors, and the stock reaction proved it. Shares are still 70% off 2024 highs after investors fled due to several past issues. Investors are trying to get beyond past internal control problems and an ongoing investigation into whether its co-founder was separately involved with illegal server shipments to China.
The fiscal Q3 earnings report showed robust AI data center demand, though, along with a welcome recovery in gross margins. Forward guidance also impressed investors, strengthening the growth strategy centered on AI.
Super Micro shares could yet be attractive, though investors would need to be comfortable moving beyond past issues.
Howard Smith has positions in Dell Technologies. The Motley Fool has positions in and recommends Hewlett Packard Enterprise. The Motley Fool has a disclosure policy.
