Shares of Super Micro Computer (SMCI -3.05%) soared as much as 11.3% higher on Thursday morning, following a fantastic earnings report by chip designer Nvidia (NVDA 1.75%). Supermicro investors saw Nvidia's success story as a good sign, since high demand for artificial intelligence (AI) accelerator chips translates into strong sales of custom AI-crunching computers.
The enthusiasm faded somewhat later in the day, and Supermicro's stock was up by 2.1% at 1 p.m. ET. Any uptick after a 52-week gain of 438% looks like good news, though.
Nvidia's market-moving results
The leader in AI chip design saw sales rise 262% year over year to $26 billion. Its data center segment's revenue surged even faster, clocking a 427% gain over the same period.
That unbroken market momentum is good news for Supermicro, since a pile of Nvidia chips or Blackwell AI accelerator cards won't train any AI systems. You need a properly integrated computer system to train them, and Supermicro's products fit the bill for many AI giants.
Why didn't Supermicro stay aloft today?
Supermicro reported its own results for the comparable period two weeks ago, tripling its top-line sales and skyrocketing even faster on the bottom line. Clever investors can see Supermicro's reports as a bellwether of what Nvidia might be up to.
That being said, I'm not surprised to see Supermicro's Nvidia-based gains fade out. Again, the company's own results already pointed in this direction, and Wall Street has had plenty of time to price Supermicro's stock accordingly.
On that note, Nvidia's growth might be exciting, but Supermicro is matching it step for step -- and at a much milder stock valuation. Nvidia shares are changing hands at 33 times sales and 62 times earnings today, while Supermicro's valuation ratios stop at 4.4 and 50, respectively. So if you're looking for a high-octane AI stock at a more modest price level than Nvidia, Supermicro could fit the bill.
