Why these analysts call Super Micro the "poster child" of surging AI server demand

Investing.com -- Information technology group Super Micro Computer Inc (NASDAQ:SMCI) has become a "poster child" for a massive spike in enthusiasm for artificial intelligence-optimized applications over the past year, according to analysts at Bernstein.

The analysts said in a note to clients that Super Micro has been boosted in particular by early success in its production of servers designed specifically for AI workloads.

They noted that several factors have contributed to the outperformance, including "ownership of its manufacturing facilities (allowing unique flexibility, and time to market), attractive product features (liquid cooling) and early product availability." Key large accounts with tech giants like Facebook-owner Meta Platforms (NASDAQ:META) and electric vehicle maker Tesla (NASDAQ:TSLA) have also fueled returns.

Super Micro has guided for full-year 2024 revenue of $14.3 billion to $14.6 billion, representing a doubling of its prior year total and three times its 2022 top-line result. In the longer-term, the San Jose-based group estimates that revenues could climb to $50B - $60B.

The Bernstein analysts projected that, based on expected data center revenues at industry-leader Nvidia (NASDAQ:NVDA), overall AI server market revenue could be $160B or more in 2025.

"As AI moves to inferencing, more infrastructure will be purchased by corporates," the analysts said.