Shares of Super Micro Computer ( SMCI ) are taking off after the company raised guidance for the second quarter of fiscal 2024. The company now expects to report revenue of more than $3.6 billion, well above the previous forecast of $2.9 billion. Adjusted earnings are now expected to be $5.40 to $5.55 per share compared to previous guidance of $4.40 to $4.88 per share.
Yahoo Finance reporter Madison Mills joins the show live from the NYSE to explain the latest developments for the company and what it could mean moving forward.
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Editor’s Note: This article was written by Nicholas Jacobino
Video version
Sina Smith: Shares of Super Micro Computer rose nearly 11%. This comes after the company boosted its sales and earnings guidance for the second quarter. Madison Mills of Yahoo Finance stands on the floor of the New York Stock Exchange with more. material?
Madison Mills: So, SMCI, is the newest name to watch if you’re looking at what’s fueling this rise in AI. This is a super computer company. It will be driven by the customization of the hypermobility scale. So what does that mean? Basically, Microsoft, the Apples of the world, have these huge data centers, and they store all of our data on our phones here. And that’s really hard to keep up with. Because just like we do with our phones, we start running out of storage space.
So big tech companies have to look elsewhere for storage. And SMCI is one of those places, where they start looking. So, again, this is one of the names that will benefit from the overall trend towards AI. And this benefit, I can’t stress enough, what a huge surprise to my sources this morning. Their revenue forecasts rose by more than 100%. They expect revenue of $3.6 billion this coming year.
Their latest forward guidance said that would be just $2.7 billion. This stock is already up 20% year to date. As I mentioned, it was up 11% in the pre-market this morning. So, again, this is the latest name that will fuel this rise in AI and technology.
And it’s important for our investors to look at this name because it’s not going to have the extreme multiple expansion and high valuation that makes some of those go for the seven great names. Too expensive for investors to break into. That’s why this is a stock to watch.
Having said that, some analysts say AMD names more associated with the Asian market may be better. But for those who don’t want to get into stocks that are more specifically tied to what’s happening in China, this is a stock that people will be interested in.
Sina Smith: Good. certainly. Good. Madison Mills, we will be in touch with you in just a few minutes.