Why is the stock price of Super Microcomputer (SMCI) soaring?

This year, notable AI-related stocks are frequently traded in conjunction with each other. When a company makes good financial results that exceed expectations, or acquires large new contracts or alliances, that alone often causes other players in that field to rise drastically. Broadcom's quarterly financial results have exceeded expectations, and it seems that Super Micro Computer's stock price is also benefiting from that.

Connectivity semiconductor and software company Broadcom recorded better-than-expected quarterly sales and profits after the market closed yesterday. The tech specialist reported sales of $12.49 billion and non-GAAP (adjusted) earnings per share of $10.96 billion for the second quarter of the current fiscal year ending May 5. Sales increased approximately 43% from the same period last year, and rising demand for AI-related technology spurred growth. Meanwhile, the average analyst forecast predicted sales of 12.01 billion dollars, and adjusted earnings per share of 10.84 dollars. In addition to rising sales and profits, the company also revised its full-year earnings forecast upward.

Broadcom's second-quarter results followed Oracle's promising report earlier in the week. Oracle's quarterly sales and profits fell short of Wall Street's expectations, but the company's management issued very promising guidance.

In particular, Oracle seems to have achieved great success in the AI and cloud infrastructure markets. Since Supermicro is a provider of high-end rack servers used for artificial intelligence, data centers, and other high-speed computing applications, this week's good news from Broadcom and Oracle bodes well for Supermicro stocks.