Data center specialist Super Micro Computer, also known as Supermicro, raised its sales and earnings guidance significantly for the December quarter. SMCI stock rocketed Friday on the news.
The San Jose, Calif.-based company late Thursday said it now expects sales of $3.6 billion to $3.65 billion, up from its prior guidance of $2.7 billion to $2.9 billion, for its fiscal second quarter ended Dec. 31. The midpoint of $3.625 billion is well above Wall Street's target of $2.8 billion.
Supermicro predicted adjusted earnings per share of $5.40 to $5.55, up from its previous outlook of $4.40 to $4.88. The midpoint of $5.48 a share compares with the analyst target of $4.51, according to FactSet.
Supermicro cited a "strong market and end customer demand for our rack-scale, AI and total IT solutions" for the raised guidance, according to a news release.
SMCI Stock Pops On Revised Outlook
Supermicro said it will release its final Q2 results on Jan. 29.
SMCI stock soared 35.9% to close at 423.36 on the stock market today.
With the move, SMCI stock blasted out of a 6-month consolidation pattern at a buy point of 357, according to IBD MarketSmith charts.
Supermicro stock scored at least two price-target increases from Wall Street analysts after the guidance change.
Expertise In Liquid-Cooled Server Racks
Investment bank Barclays on Friday raised its price target on Supermicro stock to 396 from 335 while maintaining its overweight rating. Rosenblatt Securities upped its price target to 550 from 430 and kept its buy rating.
Rosenblatt analyst Hans Mosesmann said Supermicro has grabbed a disproportionate share of the AI data center market because of its expertise in liquid-cooled server racks.
"Liquid cooling in the datacenter is a must-have for next-generation AI compute hardware solutions," Mosesmann said in a client note.
Further, SMCI stock is on the IBD 50 and Tech Leaders lists.
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