(Reuters) -Super Micro Computer (SMCI) forecast first-quarter revenue above analysts’ estimates on Tuesday and announced a 10-for-1 stock split following a rally in its shares as Wall Street bets heavily on the future of generative AI technology.
Shares of the San Jose, California-based company surged 12% in extended trading. AI front-runner Nvidia’s shares rose 4% while Arm Holdings was up 2.6% following results.
The company’s share price has more than doubled so far this year, driven by a months-long rise in AI-linked stocks as investors poured billions of dollars into genAI technology.
Trading will commence on a split-adjusted basis on October 1, 2024.
Super Micro is one of the biggest beneficiaries of a surge in spending on advanced data center architecture, which support the complex processing needs of genAI.
Super Micro’s results may also help allay some concerns of the AI rally tapering off, following disappointing results from large cloud providers like Microsoft and weak macroeconomic data which prompted a sell-off in chip stocks last week.
The company expects net sales between $6 billion to $7 billion for the first quarter, compared to analysts’ average estimate of $5.46 billion, according to LSEG data.
(Reporting by Arsheeya Bajwa in Bengaluru)
