Super Micro Computer released a preliminary update showing September-quarter revenue and gross margin well above its earlier outlook. Shares rose in extended trading, and Dell and HPE gained alongside them. Full results are due Nov. 3.
Super Micro Computer expects September-quarter revenue of $18.5 billion to $19.5 billion, far ahead of its prior forecast of $14.5 billion to $15.5 billion. The AI-server maker disclosed the figures on Tuesday in a surprise business update.
Shares jump in after-hours trading
MarketWatch reported that Super Micro's stock was up 14% in Tuesday's extended session. Reuters, by contrast, put the gain at 11.3% in after-hours trading.
Rivals followed. Dell's stock was up 6% after hours and HPE's up 5%, and both had suffered heavy losses the previous week, according to MarketWatch.
Revenue and margin beat estimates
Analysts tracked by FactSet had expected revenue of $14.9 billion. Reuters cited an LSEG average estimate of $15.23 billion.
The company also estimates its gross margin at 12% to 12.5%, versus a prior outlook of 10.4% to 10.8%. Reuters said the margin range sits above analysts' estimate of 10.15%, primarily due to customer and product mix.
Analyst sees a positive signal for AI demand
Evercore ISI analyst Amit Daryanani called a 12% to 12.5% gross margin an impressive feat for Super Micro, given that Dell has been known for a historical pricing premium in AI servers. He wrote that the update is a positive data point for AI compute demand and bodes well for Dell and Hewlett Packard Enterprise.
Questions remain, however. Daryanani noted it is not yet clear how much of the quarter's business came from major cloud companies versus newer cloud providers such as CoreWeave and SpaceX, and the company's official earnings results arrive on Nov. 3.
Sources: MarketWatch, Investing.com
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