Super Micro stock soars after upbeat revenue forecast shows robust AI demand

Super Micro Computer SMCI-Q jumped over 12 per cent 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 per cent to US$36.44 in premarket trading.

Super Micro forecast first-quarter revenue between US$18.5-billion and US$19.5-billion, above analysts’ expectations of US$15.23-billion, according to data compiled by LSEG.

It now expects profit margins in the range of 12 per cent to 12.5 per cent versus earlier expectations of between 10.4 per cent and 10.8 per cent.

The ongoing scramble to build data centres has largely benefited semiconductor and AI server makers, including Super Micro.

Microsoft MSFT-Q, Google GOOGL-Q, Amazon AMZN-Q and Meta META-Q are expected to spend more than US$700-billion on AI infrastructure this year.

Other server makers Dell DELL-N and Hewlett Packard Enterprise HPE-N also gained 5.2 per cent and 4 per cent, 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 centre operators, which have been issuing debt to fund their buildout at a time when borrowing costs are rising.

CoreWeave, a heavily indebted data centre operator, was at the centre of a selloff last week that also rattled AI-linked stocks.