In Silicon Valley, a lesser-known computer maker, SuperMicro, has seen its stock jump this year as part of the AI frenzy.
Right off one of the main freeways in Silicon Valley is a cluster of non-descript, off-white buildings, some hidden by trees, with the name SuperMicro on the front.
Founded in 1993, the same year as Nvidia, SuperMicro is seeing its servers being purchased to run generative AI applications. Since January, its stock had soared over 200%, but its shares have fallen back slightly in recent days and it is now trading around $222. Even so, it is up over 400% from a year ago, a far cry from when it was delisted in 2018 for almost two years due to material weaknesses in its financial reporting.
SuperMicro makes building-block solutions for the computer industry, data centers, cloud-computing services and many corporate enterprises: motherboards, servers and big racks of massive computing power. The company has also been focused on green computing for nearly 20 years, saying it’s saving its server owners hundreds of thousands of dollars a year in electricity costs. And AI servers, running generative AI and large-language models, use up even more power.
The company attributes that growth to its many partnerships, its ability to optimize servers for its customers, and the close relationships it has with many customers and partners in Silicon Valley, where about half of its almost 5,000 employees work. While SuperMicro saw nearly 60% annual revenue growth in calendar 2022, its most recent quarter disappointed Wall Street. For fiscal 2022, ended June 2022, revenue jumped 46%. In April, it warned investors of a revenue shortfall for the March-ending quarter because of component supply issues, but when it reported its results in May, the street was buoyed by guidance and its discussion of demand stemming from its servers ability to handle generative AI.
“And we believe that a large portion of that will be driven by accelerated computing and large-language models. So that’s really going to drive things,” Weigand said.
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