- Super Micro Computer (SMCI) stock rose nearly 3% to $40.21 in premarket trading on Wednesday, following an 8.5% gain to $39.14 the previous day, driven by strong AI server demand.
- Foxconn, a rival AI server maker, reported a 25% sales increase for the first two months of the year, with a projected 22% rise in Q1, boosting industry optimism.
- Despite accounting concerns and insider sales of millions by top executives on February 26, Super Micro remains a volatile yet popular AI trade among retail investors.
Super Micro Computer (SMCI) is riding a wave of positive momentum, with its stock climbing $1.07, or 2.73%, to $40.21 in premarket trading on Wednesday. This uptick follows an impressive 8.5% gain the previous day, bringing the closing price to $39.14, even as broader markets faltered over tariff concerns. What’s fueling this rally? Investors seem to be zeroing in on the booming demand for artificial-intelligence (AI) servers, and Super Micro isn’t alone in benefiting. A rival, Taiwan’s Hon Hai Technology Group – better known as Foxconn – reported a hefty 25% jump in sales revenue for the first two months of the year, hitting 1.1 trillion New Taiwan Dollars, or roughly $33-plus billion. Foxconn, a key player in manufacturing AI servers with Nvidia (NVDA) chips just like Super Micro, is forecasting a strong first quarter with sales expected to rise 22% year-on-year to 1.6 trillion New Taiwan Dollars. In fact, Foxconn said that “the sequential performance for the first quarter is expected to be better than the average level of the past five years, and will see strong growth year-over-year.” This rival’s success signals a broader industry tailwind that’s likely lifting Super Micro’s stock as well.
The AI server market is red-hot, and Super Micro is capitalizing on it despite some rocky patches. Just last week, the company dodged a major bullet by meeting a compliance deadline and filing its delayed 10-K form, avoiding delisting from the Nasdaq Composite (^IXIC). That news sent shares soaring, though they’ve since pulled back from those highs. Adding to the complexity, Senior Vice Presidents Sara Liu and George Kao sold millions of dollars’ worth of stock on February 26, cashing in while the price was surging post-filing. Moves like that might raise eyebrows, especially given ongoing questions about the company’s accounting practices. Yet, retail investors aren’t deterred. Super Micro has become a darling of the AI trade, with some even piling into leveraged single-stock funds to amplify their bets. That enthusiasm explains why the stock’s price swings are so sharp—volatility comes with the territory when a company captures this kind of attention.
Foxconn’s glowing numbers offer a glimpse into what’s driving Super Micro’s appeal. Both companies are deeply tied to Nvidia, a leader in AI chip technology, and the demand for servers packed with those chips isn’t slowing down. Foxconn’s 25% sales increase to 1.1 trillion New Taiwan Dollars and its projected 22% growth to 1.6 trillion New Taiwan Dollars in the first quarter highlight a market hungry for AI infrastructure. Super Micro, with its 2.73% premarket jump to $40.21 and 8.5% climb to $39.14 the day before, is clearly tapping into that same demand. Sure, the company’s recent past has been messy – accounting delays and insider sales don’t scream stability – but the bigger picture is about opportunity. Investors, especially the retail crowd, are betting that AI’s rise will outweigh those hiccups. In a tech landscape where artificial intelligence is reshaping industries, Super Micro’s stock moves suggest it’s still very much in the game.
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