Super Micro sees quarterly revenue soaring on AI server boom

By Reuters News

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

Rivals Dell DELL.N and HPE HPE.N gained between 3.5% and 4.9%. Nvidia NVDA.O, the AI chip giant, was up 1.5%.

Big Tech's race to build out data centers has made firms such as Super Micro among the biggest beneficiaries of the AI boom. The top four cloud-computing companies, a group that includes Microsoft, Google and Amazon, are expected to spend more than $700 billion on AI infrastructure this year.

That is showing up in Super Micro's results.

The server maker 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.

Super Micro also now expects gross margins to be in the range of 12% to 12.5%, versus the prior expectation of 10.4% to 10.8%, and above analysts' estimate of 10.15%, primarily due to customer and product mix.

Capital.com is an execution-only brokerage platform and the content provided on the Capital.com website is intended for informational purposes only and should not be regarded as an offer to sell or a solicitation of an offer to buy the products or securities to which it applies. No representation or warranty is given as to the accuracy or completeness of the information provided.

The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance.

To the extent permitted by law, in no event shall Capital.com (or any affiliate or employee) have any liability for any loss arising from the use of the information provided. Any person acting on the information does so entirely at their own risk.

Any information which could be construed as “investment research” has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.