Super Micro Computer shares rocketed on Wednesday after the company delivered roughly in-line fiscal third-quarter results but guided much higher than views for the current period. SMCI stock surged more than 28% on the news.
The San Jose, Calif.-based company, better known as Supermicro, late Tuesday said it earned an adjusted $1.63 a share on sales of $1.28 billion in the quarter ended March 31. On a year-over-year basis, Supermicro earnings rose 5% while sales fell 5%.
On April 24, Supermicro warned that its fiscal third-quarter revenue would fall well short of expectations. Supermicro slashed its sales goal to $1.28 billion from its earlier forecast of $1.47 billion. The company blamed the shortfall primarily on component shortages impacting its next-generation server products.
However, for the current quarter, Supermicro predicted adjusted earnings of $2.46 a share on sales of $1.8 billion. That's based on the midpoint of its outlook. Wall Street had predicted earnings of $1.76 a share on sales of $1.64 billion in the fiscal fourth quarter ending June 30. Its guidance would translate to a year-over-year decline of 6% in earnings but growth of 10% in sales.
SMCI Stock Pops Higher After Report
On the stock market today, SMCI stock jumped 28.3% to close at 133.95. Earlier in the session it notched an all-time high of 136.63. During the regular session Tuesday, SMCI stock dipped 0.7% to close at 104.43.
"Supermicro continues to see record levels of engagements in our new generation product lines, especially for AI applications," Chief Executive Charles Liang said in a news release.
He added, "With the recent new key components supply chain challenges mostly in the rearview mirror and production normalizing, we expect to gain share and expand scale as we emerge as the true leader for rack-scale Total IT Solutions."
Loop Capital Markets analyst Ananda Baruah reiterated his buy rating on SMCI stock and hiked his price target to 150 from 100.
"The momentum continues to build for this well-positioned artificial intelligence (AI) server vendor," Baruah said in a note to clients. "Supermicro laid out a path to sustainable growth in its AI business over the next four to six quarters."
SMCI stock is on three IBD stock lists: IBD 50, Stock Spotlight and Tech Leaders.
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