Stock Market Today, July 22: Super Micro Computer Surges on Record Q4 Orders and Surprise Margin Beat
Super Micro Computer (NASDAQ:SMCI), an AI-optimized server and storage systems provider, closed at $30.56, up 19.84%. A preliminary fiscal fourth-quarter update pointed to gross margins about double the forecast and record orders. Investors are watching the Aug. 11 earnings report for confirmed figures and order conversion.
Trading volume reached 159.3 million shares, coming in about 204% above its three-month average of 52.4 million shares. Super Micro Computer IPO'd in 2007 and has grown 3,389% since going public.
How the markets moved today
The S&P 500 (SNPINDEX:^GSPC) fell 0.13% to 7,499, while the Nasdaq Composite (NASDAQINDEX:^IXIC) dropped 0.57% to 25,691. Among computer hardware and AI server/storage systems peers, Dell Technologies (NYSE:DELL) rose 9.32% to $441.80, and Hewlett Packard Enterprise (NYSE:HPE) gained 3.02% to $48.13, reflecting continued investor interest in AI infrastructure spending.
What this means for investors
Super Micro Computer’s preliminary fourth-quarter update impressed investors with its gross margin prediction more than anything. While a record backlog aided by over $60 billion in new orders was also welcome news, revenue for the quarter will come in at the low end of the company’s guidance.
The latter seems to be short-term negative; however, profitability levels are much more important to investors. There is clearly high demand for its liquid-cooled lineup of AI server racks.
Even with that good news, though, investors should keep an eye on what Supermicro says about any capital raising plans after it announced a $7 billion financing plan last month to help fund equipment purchases to meet its growing order book.
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Howard Smith has positions in Dell Technologies and has the following options: short August 2026 $250 calls on Dell Technologies. The Motley Fool has positions in and recommends Hewlett Packard Enterprise. The Motley Fool has a disclosure policy.
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