Shares of Super Micro Computer (SMCI 0.50%) were moving higher today after the company delivered strong fiscal second-quarter results and impressed the market with its guidance.
Supermicro had already reported preliminary results, so the second-quarter numbers weren't a surprise, but the guidance made it clear that the company's rapid growth from the artificial intelligence (AI) boom will continue for the rest of the year.
As of 1:21 p.m. ET, the stock was up 3.1% after trading up as much as 11.9% earlier in the session.
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Supermicro impresses again
Supermicro has been one of the best-performing stocks on the market since the start of 2023. The maker of high-density servers and storage equipment has emerged as a beneficiary of the AI boom as training AI models requires fast response times and handling large volumes of data, something its hardware excels at.
Supermicro said revenue jumped 103% in the quarter to $3.66 billion, well ahead of the earlier analyst consensus at $3.06 billion and the company's original guidance of $2.7 billion to $2.9 billion.
Gross margin fell from 18.7% to 15.4%, but adjusted earnings per share still soared from $3.43 to $5.59, topping estimates at $4.93.
CEO Charles Liang said, "While we continue to win new partners, our current end customers continue to demand more [of] Supermicro's optimized AI computer platforms and rack-scale Total IT Solutions."
NASDAQ: SMCI
Key Data Points
Momentum is building
Supermicro lifted its guidance aggressively for the current quarter and full year. For the third quarter, the company expects revenue of $3.7 billion to $4.1 billion, and adjusted earnings per share of $5.20 to $6.01, up from $1.63 in the quarter a year ago. For the full year, the company raised its revenue guidance from $10 billion-$11 billion to $14.3 billion-$14.7 billion, implying revenue will jump 104% for the full year.
Based on those numbers, Supermicro stock looks affordable at a forward P/E ratio of less than 30, though investors seem to believe this boom will be short-lived.
At this point, the company has more demand than it can serve, and there's no sign of a slowdown. While Supermicro is a cyclical business, with the AI boom just ramping up, there still seems to be considerable upside potential in the stock.
