Super Micro Computer Stock Is Surging Wednesday: What's Going On?

Super Micro Computer Inc SMCI shares are trading higher Wednesday in sympathy with Advanced Micro Devices, Inc. AMD, which popped after reporting strong financial results for the second quarter.

What Happened With AMD: AMD reported second-quarter revenue of $5.835 billion, beating analyst estimates of $5.724 billion. The chipmaker reported adjusted earnings of 69 cents per share, beating analyst estimates of 68 cents per share.

"We delivered strong revenue and earnings growth in the second quarter driven by record Data Center segment revenue. Our AI business continued accelerating and we are well positioned to deliver strong revenue growth in the second half of the year led by demand for Instinct, EPYC and Ryzen processors," said Lisa Su, chair and CEO of AMD.

"The rapid advances in generative AI are driving demand for more compute in every market, creating significant growth opportunities as we deliver leadership AI solutions across our business."

AMD said it expects third-quarter revenue to be between $6.4 billion and $7 billion versus estimates of $6.61 billion. The company anticipates third-quarter gross margin of approximately 53.5%. AMD also said on its conference call that it expects GPU revenue to exceed $4.5 billion this year, up from its prior forecast of approximately $4 billion. 

AMD shares were up approximately 8% at the time of writing.

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Why It Matters: Several semiconductor names are moving higher alongside AMD as investors become more optimistic about chip earnings.

Super Micro is scheduled to report financial results for its fiscal fourth quarter after the market close on Aug. 6. The company is expected to report earnings of $8.10 per share and quarterly revenue of $5.294 billion, according to estimates from Benzinga Pro.

Super Micro has beat revenue estimates in three of the past four quarters. The company has also delivered an upside earnings surprise in four consecutive quarters heading into next week’s print.

What Else: Some chip stocks may also be getting a lift after Reuters reported that the Biden administration plans to propose a new rule next month that would expand the United States’ ability to stop foreign exports of semiconductor manufacturing equipment to Chinese chipmakers.

The report indicates that shipments from allies that export key chipmaking equipment, including Japan, the Netherlands and South Korea, will be excluded from the new rule, limiting its impact, according to sources familiar with the matter.

SMCI Price Action: Super Micro shares were up 5.57% at $703.45 at the time of publication, according to Benzinga Pro.

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