Super Microcomputerr SMCI shares soared 4.9% in the last trading session to close at $457.38. The move was supported by solid volume with many more shares changing hands than in a normal session. This compares to the stock’s 50.6% gain over the past four weeks.
The increase in share price can be attributed to the company’s optimistic preliminary financial results for the second quarter of fiscal 2024.
The company now expects net sales to be between $3.6 billion and $3.65 billion compared to an earlier guidance range of $2.7-$2.9 billion. GAAP net income per share is expected to be in the range of $4.90-$5.05 (previous projection: in the range of $3.75-$4.24 per share).
Non-GAAP net income per share is now expected to be between $5.40 and $5.55 compared to an earlier guidance range of $4.40 – $4.88 per share.
SMCI will report its results for the fiscal second quarter on January 29, 2024.
The company is a total IT solution provider for AI, cloud, storage and 5G/Edge technologies. Rising demand for AI infrastructure and new compute and storage products bode well. SMCI is fast becoming a leading provider of “rack-scale plug-and-play” Total AI and IT Solutions. The company’s next-generation AI and CPU platforms drive higher project wins, orders and backlog.
SMCI expects diversified revenue growth mainly from upcoming computer service providers or CSPs, advanced data centers, as well as higher corporate investments in new CPU servers and edge, AI, Internet of Things and telco markets.
This server technology company is expected to post quarterly earnings of $5.07 per share in its next report, which represents a year-over-year increase of +55.5%. Revenues are expected to be $3.21 billion, up 78.3% from the year-ago quarter.
While earnings and revenue growth expectations are important to assess the potential strength in stocks, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock prices.
For Super Micro, the consensus EPS estimate for the quarter was revised 4% lower over the last 30 days to the current level. And a negative trend in earnings revisions usually does not translate into price appreciation. So, be sure to keep an eye on SMCI going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here >>>>
Super Micro is part of the Zacks Computer- Storage Devices industry. Netlist, Inc. NLST, another stock in the same industry, closed the last trading session 4.6% lower at $1.79. NLST returned 32.4% in the past month.
The consensus EPS estimate of Netlist, Inc. for the next report remained unchanged over the past month at -$0.07. Compared to the company’s previous year’s EPS, this represents a change of -16.7%. Netlist, Inc. currently boasts a Zacks Rank of #3 (Hold).
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Super Micro Computer, Inc. (SMCI): Free Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.