Computer server maker Super Micro Computer 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 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 and Nvidia 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."
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