SMCI Stock Jumps On Raised Guidance Amid Strong Computer Server Demand

Computer server maker Super Micro Computer (SMCI) raised its guidance for June-quarter revenue and profit, pointing to expected upside from customer design wins. SMCI stock jumped on the news.


San Jose, Calif.-based Super Micro released preliminary fiscal fourth-quarter results after the market close on Wednesday. Super Micro stock jumped 15.1% to 52.45 in morning trades on the stock market today.

With the move, SMCI stock surged above a previous 5% buy zone that extended to 50.49 from an entry point of 48.09, according to MarketSmith charts.

However, SMCI stock has been volatile. It broke out of a 16-week consolidation period on May 4 after its last earnings report. SMCI hit an all-time high of 58.34 the next day. But it triggered a stop-loss sell rule on June 16 when it fell 7% to 8% below its 48.09 buy point.

Its current sloppy stock chart suggests a cup pattern with a potential buy point at 58.44.

SMCI Stock: Earnings Call Set For Aug. 9

Super Micro upped its adjusted earnings forecast for the June quarter to a range of $2.30 to $2.40 a share vs. its prior guidance of $1.51 to $1.69. Super Micro said it expects June-quarter revenue in the range of $1.58 billion to $1.63 billion, up 50% from a year earlier, ahead of the company’s prior $1.4 billion to $1.48 billion guidance.

The company has scheduled an earnings call for Aug. 9.

Super Micro builds computer servers using x86-based microprocessors from Intel (INTC) and other chipmakers. INTC stock slipped 1.7% to 39.87 on Thursday.

“While it is important to note that Super Micro has been reporting significant above-industry growth over the past several quarters, we do believe Super Micro’s results could be considered a net positive data point for enterprise server and server CPU demand,” Wells Fargo analyst Aaron Rakers said in a report.

Earnings for INTC stock are due July 28 amid fierce competition with Advanced Micro Devices (AMD) and Nvidia (NVDA) in the computer server market.

Super Micro A Share Gainer

Super Micro builds computer servers in Taiwan. It also uses microprocessors from AMD and Nvidia.

According to a Bloomberg report, Super Micro’s computer servers are used in Bitcoin cryptocurrency mining in China.

“Super Micro had roughly a 5.3% ship share in x86 servers during Q1, up from a 4.9% share a year ago, according to Gartner,” Rakers said. “We would also note that Super Micro has had a strong position in high-performance computing (HPC) environments using Nvidia GPUs.”

At Susquehanna, analyst Mehdi Hosseini had a cautious view of Super Micro’s June quarter pre-announcement.

“Is the quarterly revenue and earnings of $1.6 billion and $2.40, respectively, a peak?,” he asked in a research note. “We await the company’s earnings conference call scheduled for Aug. 9 for additional color.”

If you’re new to IBD, consider taking a look at its stock trading system and CAN SLIM basics. Recognizing chart patterns is one key to the investment guidelines.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.


Stock Market Comeback Continues As Bulls Catch Bears; Netflix Boosts This Group

Bear Market News And How To Handle A Market Correction

Best Growth Stocks To Buy And Watch: See Updates To IBD Stock Lists

Chart Reading For Beginners: Nvidia, Amazon, Pinterest Reveal This Key Investing Skill

Super Micro Computer Jumps On Raised Guidance Amid Strong Server Demand