Super Micro Computer Stock Is Surging Again: What's Going On?

Super Micro Computer Inc SMCI shares are soaring again Wednesday after rising 16% on Tuesday. Here’s a look at what’s going on.

What To Know: Super Micro shares surged alongside the broader market to start the week after the U.S. and China agreed to a temporary trade deal over the weekend. The world’s two biggest economies struck a deal in which the U.S. will lower tariffs on Chinese goods from 145% to 30%, and China will cut tariffs on U.S. goods from 125% to 10%.

Super Micro shares continued to rise on Tuesday amid positive analyst coverage. The company also announced the shipping launch of new micro cloud servers powered by AMD EPYC 4005 Series processors, optimized to balance performance density, scalability and affordability.

“These servers offer up to 2080 cores on a standard 42U rack, greatly reducing data center rack space and overall TCO for enterprise and small and medium businesses,” said Mory Lin, vice president, IoT/Embedded & Edge Computing at Super Micro.

Raymond James analyst Simon Leopold initiated coverage on Super Micro with an Outperform rating and set a price target of $41, which helped fuel continued momentum in the name.

The analyst firm said the company is in a “sweet spot" between traditional IT vendors and contract manufacturers. Analysts at Raymond James highlighted the company’s strong growth, which has been overshadowed by internal financing controls, which came under scrutiny after Super Micro’s independent auditor resigned last October over governance and transparency concerns, which led the company to delay the filing of its quarterly and full-year results.

Super Micro last reported quarterly results on May 6. The company reported adjusted earnings of 31 cents per share, missing analyst estimates of 50 cents per share, and revenue of $4.6 billion, below forecasts of $5.42 billion.

Check This Out: Saudi Arabia Bets Big On AI, Teams Up With AWS And NVIDIA

The company preannounced results in late April, citing delayed customer platform decisions that moved sales into the fourth quarter.

“We do expect many of those commitments to land in the June and September quarters, reinforcing my confidence in our ability to meet our long-term targets, however, economic uncertainty and tariff impacts may have a short-term impact. We believe that we are well-positioned in the long term to capitalize on the growing market opportunity,” CEO Charles Liang said in the earnings release.

Several tech stocks are getting a boost after signing deals in Saudi Arabia this week. Saudi Arabian data center company DataVolt announced a new deal with Super Micro after the market close on Tuesday, which appears to be helping drive momentum on Wednesday.

The companies signed a multi-year partnership agreement to fast-track the delivery of ultra-dense GPU platforms and rack systems for DataVolt's hyperscale AI locations.

“We are excited to partner with DataVolt and continue expanding our manufacturing efforts in the United States. By working together, we will bring cutting-edge AI and compute infrastructure, enabling the Kingdom's vision of becoming a global hub for technology and innovation,” Liang said in a statement.

SMCI Price Action: Super Micro shares were up 17.0% at $45.54 at the time of publication Wednesday, according to Benzinga Pro.

Photo: Shutterstock.