Super Micro stock soars: AI server boom drives record earnings

Super Micro Computer shares climbed in extended trading after the company reported record quarterly revenue and delivered a stronger-than-expected outlook. Strong demand for AI-optimised servers and data-centre infrastructure drove the performance. The stock gained 7.2% in after-hours trading, according to the report carried by KuCoin. (Sources: Reuters, Quartz, KuCoin)

Super Micro reported first-quarter fiscal 2027 revenue of $19.95 billion, compared with $5.02 billion a year earlier. Revenue increased nearly fourfold year-on-year, comfortably beating analysts' average estimate of $16.39 billion. Net income rose to $1.59 billion from $168 million in the year-ago quarter, while adjusted earnings reached $1.81 per share, beating the $1.23 analyst estimate.

Super Micro forecasts second-quarter revenue of $19.5 billion to $21.5 billion, exceeding Wall Street's estimate of $17.14 billion, according to Reuters. The company expects adjusted earnings of $1.66 to $1.90 per share. The upbeat guidance reinforces expectations of sustained demand for AI computing infrastructure.

The company raised its fiscal 2027 revenue forecast to $72 billion-$82 billion from its previous guidance of $65 billion-$72 billion. The revised forecast midpoint is also above Wall Street's estimate of $69.17 billion. The upgraded outlook reflects the company's confidence in continued demand for AI servers and data-centre infrastructure.

Super Micro benefits from growing demand for Nvidia-powered server systems as cloud providers and technology companies expand data-centre capacity to support artificial intelligence workloads. The company is increasingly positioning itself as a comprehensive AI and IT data-centre solutions provider rather than just a server assembler. Its expanding production capacity is helping it cater to large-scale AI infrastructure deployments.

Super Micro's gross margin improved to 12.7% in the September quarter from 9.3% a year earlier. However, operating activities consumed $434 million in cash during the quarter. The company reports cash and cash equivalents of $6.9 billion against $8.6 billion in bank debt and convertible notes. Investors will watch whether rapid revenue growth translates into stronger cash generation and sustainable profitability.

Super Micro continues to face scrutiny following a contractor's guilty plea in a case involving the illegal export of servers containing advanced Nvidia AI chips to China. Reuters reports that CFO Mark Long says the company is embedding compliance into its corporate culture and expanding resources for internal controls. Investors will monitor execution, financial controls and profitability as the AI infrastructure business expands.

(Disclaimer: This slideshow is based on inputs from agencies. These do not represent the views of The Economic Times)