Super Micro Computer rides AI server boom to join S&P 500
By Akash Sriram
(Reuters) — Super Micro Computer (NASDAQ:SMCI), which joins the S&P 500 on Monday, enjoys a rare advantage among server makers that are trying to tap the generative AI boom — close ties with Nvidia (NASDAQ:NVDA) that help it launch products faster than rivals Dell (NYSE:DELL) and Hewlett Packard Enterprise (NYSE:HPE).
The company has historically been among the first to receive artificial intelligence chips from Nvidia and Advanced Micro Devices (NASDAQ:AMD) as it helps them check server prototypes, giving it a head start over rivals, analysts and industry experts said.
That has helped turn the company into a key supplier of servers essential for generative AI apps and sent Super Micro's shares up 289% so far this year.
Some analysts estimate Super Micro, whose California headquarters are less than 10 miles away from those of Nvidia and AMD, can within just «a few weeks» manufacture, assemble, test and ship a server rack, if components are available.
«Super Micro has developed a model that is very, very quick to market. They usually have the widest portfolio of products when a new product comes out from Nvidia or AMD or Intel (NASDAQ:INTC),» said Hans Mosesmann, an analyst at Rosenblatt Securities.
Super Micro's revenue more than doubled in the last three months of 2023 and analysts polled by LSEG expect triple-digit percentage growth to continue till at least the September quarter of 2024.
Bank of America analysts estimate the company's share of the AI server market to grow to about 17% in 2026, from 10% in 2023.
That optimism is reflected in Super Micro's growing market value, which now stands at $60 billion, compared with some $5 billion before the launch of ChatGPT in November 2022.
The AI demand has
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