Shares of Super Micro Computer are experiencing a significant increase in Friday trading as the server and computer products maker raises its financial guidance for both sales and earnings.
Super Micro stock has surged by 32% to reach $410.82. If the stock manages to close above $353.29, it would mark a new all-time high, according to Dow Jones Market Data.
In a recent securities filing, the company announced that it now expects net sales between $3.6 billion to $3.65 billion for its second fiscal quarter ending on December 31. This is a substantial increase from its previous guidance of $2.7 billion to $2.9 billion.
Additionally, Super Micro anticipates adjusted earnings ranging from $5.40 to $5.55 per share, surpassing its previous range of $4.40 to $4.88 per share.
The company attributes this optimistic outlook to “a strong market and end customer demand for our rack-scale, AI and Total IT Solutions.”
Analyst Matt Bryson from Wedbush weighed in on the new guidance in a report released on Friday.
“We would note that earnings imply just flattish operating margins (assuming no unexpected charges),” Bryson wrote. “This result could suggest some gross margin deterioration as operating expense (beyond sales commissions) typically wouldn’t scale immediately with higher revenues.”
“Overall, we believe this development should be viewed as a positive for Super Micro Computer. However, the extent of the good news will ultimately depend on the details,” he added.
Wedbush rates SMCI shares at Neutral with a price target of $250.
Super Micro has announced that it will hold a conference call to discuss its second quarter results on January 29. Analysts, according to FactSet consensus estimate, are expecting the company to report adjusted earnings per share of $4.65 on sales of $2.8 billion.