Super Micro Computer stock continues soaring on Q2 guidance

Super Micro Computer (SMCI) stock climbs even higher ahead of Friday's closing bell, up over 35% after raising its sales and earnings guidance for its fiscal second quarter 2024. Yahoo Finance's Josh Lipton and Jared Blikre break down the new earnings estimates, monitoring Super Micro's stock and annual growth following AI trends.

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Editor's note: This article was written by Luke Carberry Mogan.

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JOSH LIPTON: Now, checking in on some trending tickers in today's trades. We count down here to the closing bell. Let's start off with shares of Supermicro computer, higher today after the company raised Q2 guidance. The company now expects to report more than $3.6 billion in revenue. That's well above the previous forecast of about $2.9 billion.

So this one, Jared, well in the green in today's trade. These were preliminary financial results and investors clearly like what they saw, beat expectations. The computer hardware maker saying it expects to beat that previous forecast. Now, they are saying preliminary adjusted EPS by the way 540 to 555, consensus, consensus was closer to 455 there.

JARED BLIKRE: Yeah. Um, just another bullish win for the AI trade here. If there's anything negative, might be, if you do the math on the updated EPS guidance gross margin, might actually be declining. But this is a company that is just experiencing phenomenal growth. Let me just take a look at the Wi-Fi interactive here where I have a chart over the last year.

And you can see, we are consolidating since last August here, and just broke in one day. Huge to the upside. And given the length of this consolidation, I have to think there's more to come there. And then you take a look at the last three years, this is a company that really came alive in the year of AI, and that's the story there. Let me just quote, Barclays, just a quick quote. They rate the stock an overweight price target.

They increased to 396 from 335, saying Supermicro likely ship 9,000 AI servers that serve business, building the computers that these chips that do all the AI work are in, in the December quarter, and that's thanks to improving GPU graphics processing unit supply, and strong AI demand. They expect another full year of 2024 guidance increasing when they report, when this company reports results later in the month. So hard to find anything negative here, maybe a little bit on the gross margin department.

JOSH LIPTON: Yeah. I mean, so the technical suggestion maybe more--

JARED BLIKRE: Oh, technicals are strong.

JOSH LIPTON: Technicals are strong. The analysts, I mean, you look at the commentary, Jared, they like this name. I mean, it's had a strong run already, but 10 buys, one hold, one sell.