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After a 700%-plus rally over the past year, Super Micro Computer Inc. is headed to the bank with a new planned convertible-debt offering, but that wasn’t getting in the way of the stock’s momentum Thursday.
Super Micro shares
SMCI,
were up 21% in morning trading, riding a wave of enthusiasm in the chip sector after Nvidia Corp.
NVDA,
delivered blowout results and guidance, while predicting that the good times could continue for years. Server maker Super Micro is an Nvidia partner and got a shoutout on the company’s earnings call.
See also: Nvidia earnings send stock rocketing as company cheers AI ‘tipping point’
In fact, Super Micro’s morning stock rally was greater than even Nvidia’s 15%-plus run, and well above other notable ones across the semiconductor sector. For example, Arm Holdings PLC shares
ARM,
were up more than 8%, Advanced Micro Devices Inc. shares
AMD,
were ahead more than 7% and Marvell Technology Inc. shares
MRVL,
were up more than 5%.
The iShares Semiconductor ETF
SOXX
was up 4.6% in morning action and on track for its biggest one-day gain since May 26, 2023, according to Dow Jones Market Data. It was also on track for a new high.
Nvidia not only posted huge growth in its latest quarter and forecast the same for its current one, but it also talked up big potential in the data-center market going forward.
“We are now at the beginning of a new industry where AI-dedicated data centers process massive raw data to refine it into digital intelligence,” Chief Executive Jensen Huang said on Nvidia’s earnings call. The company sees the potential for the installed base of data-center infrastructure to double over the next five years — and hit $2 trillion.
Opinion: Nvidia’s sheer dominance can be summed up by this one underrated number
Super Micro makes liquid-cooling technology which analysts see as increasingly important given the amount of power consumed by artificial-intelligence workloads.
Super Micro’s stock was bucking the company’s overnight announcement that it was proposing a $1.5 billion convertible-debt offering, of notes that mature in 2029. Convertible offerings are ultimately dilutive as they eventually are converted into stock, but the impact for Super Micro wouldn’t be as dramatic given the sharp run-up in the stock lately.
Admittedly, though Super Micro shares were rocketing Thursday and up so sizably over a one-year span, they’d pulled back somewhat over recent sessions and were set to snap a three-day losing streak that saw them fall 27% through Wednesday’s close.
Opinion: Why Super Micro is mopping up the floor with the competition
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