Super Micro Computer To Leverage S&P 500 Status For Debt Financing, Predicts AI Weather Forecasting

Super Micro Computer Inc SMCI CFO David Weigand appeared this week at the 52nd Annual JPMorgan Global TMC Conference.

Among the key takeaways, according to analyst Samik Chatterjee, is the company’s considering of unsecured debt as an option for future capital raises.

With strong demand for artificial intelligence (AI) servers and extended lead times for critical components like GPUs, Super Micro Computer has historically used equity and convertible bonds to pre-buy inventory.

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However, with its recent inclusion in the S&P 500 and a profile similar to an investment-grade company, unsecured debt is considered a more viable option for raising funds.

Investors are advised to monitor Super Micro Computer’s capitalizing on emerging opportunities in the AI space.

For example, the San Jose, California-based company is betting that AI will accelerate computing across various other sectors, including drug analytics and weather forecasting.

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Super Micro Computer’s partners include Nvidia Corp NVDA, Intel Corp INTC and Advanced Micro Devices AMD. These alliances should help Super Micro Computer achieve a strong pipeline of products and upside in both pricing and volumes, Chatterjee writes.

The company is also poised to significantly expand its rack capacity, with 40% of its allocation dedicated to liquid cooling.

By the end of June 2024, the company aims to reach a capacity of 5,000 racks per month, with 2,000 racks per month being liquid-cooled.

Super Micro Computer intends to position itself as an early adopter and volume provider of liquid-cooled racks, Chatterjee notes.

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