The remarkable surge in Nvidia’s shares during a single trading session has intensified the already considerable interest in AI-based computing and associated technological innovations.
Super Micro Computer, renowned for its commitment to green computing, has become a significant wealth generator for its investors. With a partnership with Nvidia, it stands as the world’s third-largest server provider, holding a market share of 5 percent.
Benefiting from the explosive growth of the generative AI market, Super Micro Computer’s shares have surged by over 80 percent in the span of a month, delivering a remarkable return of 201 percent year-to-date for its shareholders.
Over the past year, the company’s shares have soared by more than 705 percent, and in the last five years, they have skyrocketed by over 4,299 percent, with the company’s market capitalization reaching $48.10 billion.
Super Micro Computer’s reliance on Nvidia is significant for its business operations. Through a close collaboration, the California-based firm has established a thriving niche in high-growth AI servers, supported by Nvidia’s H100 GPUs.
Super Micro Computer’s revenue has seen a substantial increase, attributed directly to Nvidia’s expanding business. In the first quarter of fiscal year 2024, the company reported net sales of $3.66 billion, a significant rise from $2.12 billion in the previous year.
Furthermore, the company recently adjusted its revenue guidance for fiscal year 2024 to $14.3 billion-$14.7 billion, up from the previous range of $10 billion to $11 billion.
In the realm of Green Computing, Super Micro Computer leads the way by designing and delivering energy-efficient and eco-friendly computing components. Its servers are engineered to consume less power while maintaining high performance levels.
Recent news highlights the anticipation of strong orders from American semiconductor giant AMD, signaling a potential shift towards data center business, which demands high-performance servers. This move could reduce Super Micro Computer’s reliance on Nvidia.
With data center business being the fastest-growing segment for Nvidia, Super Micro Computer is poised to capitalize on this trend by selling more AMD-powered AI servers. Analysts predict that Super Micro Computer’s revenue from AI servers, currently comprising half of its total revenue, could increase to 17 percent within the next three years, with the entire niche market expected to expand by 150 percent.
The sustained growth of the artificial intelligence market offers promising opportunities for long-term investors, with Super Micro Computer being just one of the many companies poised to benefit from this trend.
