Super Micro Computer (NASDAQ: SMCI) stock is posting big gains in Thursday’s trading. The corporate’s share price was up 15.4% as of 1:15 p.m. ET.
Supermicro stock is gaining ground on the heels of Nvidia‘s recently published third-quarter results. Supermicro is one among Nvidia’s largest customers, and the substitute intelligence (AI) leader’s Q3 results, commentary, and forward guidance are sending bullish signals for other AI stocks.
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Nvidia published its Q3 results after the market closed yesterday and reported sales and earnings for the period that beat Wall Street’s expectations. The corporate reported non-GAAP (adjusted) earnings per share of $0.81 on revenue of $35.08 billion, beating the common analyst estimate’s call for per-share earnings of $0.75 on revenue of $33.16 billion.
The corporate also said that it was expecting revenue of roughly $37.5 billion within the fourth quarter, surpassing the common analyst estimate’s call for sales of $37.08 billion within the period. On the heels of 94% year-over-year sales growth in Q3, the corporate’s guidance for Q4 suggests annual sales growth of roughly 70%.
Nvidia’s strong performance and outlook suggest a good demand backdrop for Supermicro. And while some reports have suggested that the GPU leader has been diverting orders from Supermicro in favor of other customers, Nvidia CEO Jensen Huang name-checked the server specialist as one among his company’s “great partners” during its conference call.
Nvidia’s Q3 report and commentary suggest that spending on AI infrastructure continues to be quite strong and can remain so within the near term. The corporate’s GPUs are the core components of Supermicro’s high-performance AI servers, and its sales performance and forward guidance provide trustworthy bellwethers for the type of demand backdrop the server specialist is seeing.
However, there are still questions surrounding Supermicro that make the outlook for its stock unclear. The corporate was recently capable of avoid having its stock delisted from the Nasdaq stock exchange by submitting a filing plan to regain compliance with the Securities and Exchange Commission (SEC).
Ernst & Young resigned as Supermicro’s financial auditor in October as a result of concerns in regards to the reliability of data from the corporate’s management and audit committee. BDO has now come on board because the tech specialist’s auditor. With BDO now hired, the corporate should find a way to progress with the filing of its annual 10-K report for its last fiscal yr. But there’s still a risk that the stock may very well be delisted from the Nasdaq — or that previously reported financial results could see significant downward revisions.