Super Micro Computer Smashes Q2 Estimates, Lifts Full Year Outlook

This article first appeared on GuruFocus.

Super Micro Computer Inc. (SMCI, Financials) did far better than Wall Street thought it would in the second quarter. This was because there was a huge increase in demand for servers used in AI data centers.The company’s sales was $12.7 billion, which is 123% more than a year ago and more than $2 billion more than what analysts had expected. Adjusted profits were $0.69 per share, which is $0.20 more than what analysts had predicted.Super Micro thinks the momentum will keep going. Management expects revenues to be at least $12.3 billion in the third quarter and boosted its full-year revenue forecast to at least $40 billion. Executives indicated that most of the increase is coming from big clients who are creating GPU- and CPU-based systems to handle AI workloads.Investors were happy with the results, and the stock price went up around 3% after they came out. Costs for shipping and the supply chain keep margins low, but experts say the new report confirms Super Micro’s status as one of the primary hardware vendors for the current AI build-out.