Super Micro's stock pops as earnings show booming demand for AI servers

By Christine Ji

Super Micro is building out a 'high-quality customer base' that's fueling revenue growth, CFO Mark Long told MarketWatch

Super Micro projected that sales could reach as high as $82 billion in the fiscal year that ends next June.

Super Micro Computer impressed with its forecast as appetite for artificial-intelligence hardware continues to grow.

Shares of Super Micro (SMCI) rose 6.4% in after-hours trading following Tuesday's earnings report.

For the December quarter, Super Micro expects revenue of $19.5 billion to $21.5 billion, as well as adjusted earnings of $1.66 to $1.90 per share. Wall Street analysts were expecting $18.11 billion and $1.14, respectively.

For the full fiscal year, which ends in June, management projected total sales between $72.0 billion and $82.0 billion. Wall Street analysts were anticipating $73.0 billion.

Super Micro's outlook was the most anticipated element of its report as the company had previously given Wall Street a sneak peek at the quarter when it shared preliminary results in October. Back then, the company projected between $18.5 billion to $19.5 billion of revenue for the September quarter, well above expectations for $14.9 billion at the time.

But the company topped even its own forecast from a few weeks ago, with revenue coming out to $19.9 billion. The company's revenue has nearly quadrupled from a year before. Adjusted earnings per share of $1.81 blew past Wall Street estimates for $1.23.

Super Micro builds customizable server racks and modular hardware setups to use in data centers. In recent years, the company has been pivoting away from being a basic server assembler to become a total data-center solution provider.

"The biggest customers doing the largest deployments...are choosing Super Micro," CFO Mark Long, told MarketWatch. "That customer mix is driving the revenue growth."

Long was appointed to the CFO role in October following a 2024 advisory committee recommendation that Super Micro bring in new financial leadership.

He added that Super Micro is positioned to weather the recent turbulence in the AI trade. Investors are worried about how some companies are taking on significant debt to fund the AI buildout, but Super Micro is being picky about its customers. "We can focus on a very high-quality customer base, and we can focus on the types of businesses that are going to create the best long-term results for us," Long said.

Gross margins for the September quarter ended up at 12.8%, better than management's earlier prediction and beating the 11% expected by analysts. Investors look to gross margin to assess a company's profitability, as the metric measures the company's ability to retain revenue after paying for the cost of making its products.

The company has taken steps to expand global production capacity, making AI infrastructure faster to deploy and reducing downtime. As a result, the business has become more cost-effective.

-Christine Ji

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11-03-26 1613ET