[ad_1]
shares of super microcomputer (SMCI 0.27%) The stock is up 17.5% this week as of Thursday’s close, according to data provided by S&P Global Market Intelligence. This comes on the back of accelerated macroeconomic developments and positive analyst notes for several industry peers.
Rising tide of AI lifts many boats
Super micro computers started the week strong, posting a 5% gain on Monday. This comes amid multiple reports suggesting that Wall Street analysts expect the Federal Reserve to continue cutting interest rates for years to come.
After raising interest rates at a historic pace to curb inflation for much of the past two years, U.S. central bank officials are widely expected to cut interest rates as many as six times next year alone. The range is likely to be in increments of 0.25 percentage points. This is good for rate-sensitive growth stocks like supermicros, which tend to look more attractive to investors compared to fixed income alternatives when interest rates fall.
Supermicro extended its gains yesterday as Oppenheimer analyst Rick Schaefer named several artificial intelligence (AI) chip stocks as his “top picks” for 2024. Nvidia, marvel technology, broadcomand monolithic power system. Investors tend to correlate this optimism for these companies with the impending strong performance of Super Micro Computer, which uses his Nvidia chips in GPU systems optimized for AI and machine learning. there is.
What’s next for super micro computer investors?
The super micro computer handily beat Wall Street expectations when it last reported first-quarter results in November 2023. Judging by the timing of previous reports, the company should be planning to update shareholders on its fiscal second quarter (ending December 31, 2023). ) later this month.
As for the outlook, most analysts model fiscal second quarter revenue of $2.78 billion (up from $1.8 billion in the year-ago period) and adjusted (non-GAAP) earnings per share of $4.52. It has become Both estimates are well within the company’s own guidance for sales of $2.7 billion to $2.9 billion and adjusted earnings per share of $4.40 to $4.88.
Whether the supermicrocomputer meets, exceeds, or falls short of these expectations could determine the near-term direction of the company’s stock price. But in the meantime, investors are clearly excited about the company’s growth prospects, and the stock price is responding as well.
Steve Symington holds a position at Nvidia. The Motley Fool has a position in and recommends Nvidia. The Motley Fool recommends Broadcom, Marvell Technology, and Super Micro Computer. The Motley Fool has a disclosure policy.
[ad_2]
Source link
