Super Micro (SMCI) Stock Jumps 4.9%: Will It Continue to Soar?
Super Micro Computer SMCI shares soared 4.9% in the last trading session to close at $457.38. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 50.6% gain over the past four weeks.
The increase in share price can be attributed to the company’s upbeat preliminary financial results for the second quarter of fiscal 2024.
The company now expects net sales to be between $3.6 billion and $3.65 billion compared with earlier guided range of $2.7- $2.9 billion. GAAP net income per share is expected to be in the range of $4.90-$5.05 (previous projection: in range of $3.75- $4.24 per share).
Non-GAAP net income per share is now forecast to be between $5.40 and $5.55 compared with earlier guided range of $4.40 -$4.88 per share.
SMCI will report its results for the fiscal second quarter on Jan 29, 2024.
The company is a total IT solution manufacturer for AI, cloud, storage and 5G/Edge technologies. Increasing demand for AI infrastructure and new compute and storage products bodes well. SMCI is fast becoming a leading supplier of "rack-scale plug-and-play" Total AI and IT Solutions. The company’s next generation AI and CPU platforms are driving higher design wins, orders and backlog.
SMCI expects diversified revenue growth driven largely by upcoming computer service providers or CSPs, top-tier datacenters, as well higher enterprise investments in new CPU servers and edge, AI, Internet of the Things and telco markets.
This server technology company is expected to post quarterly earnings of $5.07 per share in its upcoming report, which represents a year-over-year change of +55.5%. Revenues are expected to be $3.21 billion, up 78.3% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Super Micro, the consensus EPS estimate for the quarter has been revised 4% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on SMCI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Super Micro is part of the Zacks Computer- Storage Devices industry. Netlist, Inc. NLST, another stock in the same industry, closed the last trading session 4.6% lower at $1.79. NLST has returned 32.4% in the past month.
Netlist, Inc.'s consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.07. Compared to the company's year-ago EPS, this represents a change of -16.7%. Netlist, Inc. currently boasts a Zacks Rank of #3 (Hold).
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