Server maker Supermicro’s stock soars on crushed earnings results and soaring profits

Supermicro, a leading provider of data center server solutions, has seen its stock soar following strong fourth-quarter earnings results. The company reported adjusted earnings of $1.70 per share, far exceeding Wall Street's expectations of 92 cents per share. Revenue for the period totaled $11.1 billion, marking a 91% increase year-over-year.

However, this fell short of the Street's consensus estimate of $11.6 billion. Supermicro's impressive net income of $1.18 billion, up from $483 million in the previous quarter, further impressed investors. The company's growing order backlog, led by Chief Executive Charles Liang, was also well-received, with Supermicro booking over $60 billion worth of new orders in the past year.

Liang highlighted the company's AI/IT solutions strategy, emphasizing the addition of several hundred enterprise and other customers. The surge in demand for high-performance computing servers to power AI workloads, driven by data center infrastructure spending, has given Supermicro considerable pricing power, which has helped boost its margins.

The company's gross margin for the quarter rose to 17.6%, surpassing the 15% to 17% forecast. Looking ahead, Supermicro anticipates revenue of $14.5 billion to $15.5 billion for the first quarter of fiscal 2027, a significant 189% to 209% increase from the same period a year ago. This outpaces Wall Street's forecast of $11.8 billion.

The company's target for fiscal 2027 is between $65 billion and $72 billion, significantly higher than the Street's forecast of $53 billion. Analysts view Supermicro's performance as a major achievement, with Constellation Research's Holger Mueller praising the company's ability to nearly double its revenue year-over-year, a feat that few would have believed possible just a few years ago.