The hottest AI "darling" in the stock market since 2023 is not NVIDIA

Super Micro Computer has risen more than 500% in a year, becoming a big winner in the AI boom. Its founder, Liang Jianhui, has become a billionaire, along with Huang Renxun and Su Zifeng, leading the current AI boom as three Chinese figures.

In the past two days, the hot AI chip giants have seen a cooling off in their momentum. AMD fell more than 3% on Monday, while NVIDIA fell nearly 2% on Tuesday, but managed to close at a historic high with a late-session rebound. Meanwhile, Super Micro Computer, which launched AI servers, has maintained a strong upward trend this week, firmly holding the throne as the big winner in the AI boom.

On Tuesday, Super Micro Computer (SMCI) opened with a rise, surging over 2% in early trading. The gains narrowed later, but expanded again during the midday session, closing up nearly 4.9%. It has set a new closing high for three consecutive trading days. Based on the closing price, Super Micro Computer has accumulated a gain of about 520% in the past year as of this Tuesday, surpassing other popular tech stocks such as NVIDIA.

Last Friday, after Super Micro Computer's stock price reached a new high, Wall Street Journal mentioned that Super Micro Computer has been one of the most outstanding tech stocks in the past two years, with an 87% increase in 2022 and a staggering 246% surge in 2023. Since the end of 2018, Super Micro Computer's stock price has increased nearly 30-fold. If someone had invested $10,000 in Super Micro Computer stock five years ago, their holdings would now be worth nearly $300,000.

Earnings report sparks an uptrend

Last Friday, Super Micro Computer announced a positive pre-announcement before the quarterly earnings report on January 29th. Its estimated performance for the fourth quarter of 2023 was far better than market expectations, causing the stock price to surge 36% in a single day.

Super Micro Computer expects its estimated revenue for the second fiscal quarter ending on December 31st to be between $3.6 billion and $3.65 billion, significantly higher than the company's previous guidance range of $2.7 billion to $2.9 billion, representing a 26% to 33% increase. The latest guidance is nearly 18% higher than the Wall Street analysts' expectation of $3.06 billion.

Based on the midpoint of the latest revenue guidance, Super Micro Computer's revenue for the second fiscal quarter is expected to double compared to the same period last year.

At the same time, Super Micro Computer also estimated that its adjusted earnings per share (EPS) for the second fiscal quarter will be between $5.40 and $5.55, a 23% to 24% increase from the previous guidance range of $4.40 to $4.48 per share.Super Micro Computer manufactures computers and sells them to businesses for website servers, data storage, and AI training. According to a report released by Wedbush analysts last Friday, the surge in sales for Super Micro Computer is mainly driven by the increased demand for NVIDIA GPUs from large companies.

Wedbush analysts reaffirmed their outperform rating last Friday, with a target price of $250, which represents a 19.7% decrease from the closing price on the previous Thursday. Some other Wall Street institutions have given more optimistic price targets.

Nomura initiated coverage on Super Micro Computer on October 20th last year with a buy rating and a target price of $413. Barclays raised its target price for Super Micro Computer from $327 to $335 on November 2nd last year and gave it an overweight rating.

Three Chinese Leaders Leading the AI Trend

Due to the significant increase in Super Micro Computer's stock price last Friday, the personal wealth of the company's founder and CEO, Charles Liang, increased by over $850 million in just one day. According to the Bloomberg Billionaires Index, Liang holds a 12% stake in Super Micro Computer, which is worth a total of $3.3 billion, including these shares and additional stock options.

According to some media reports, two years ago, after watching the disaster movie "The Day After Tomorrow," Liang made the decision to focus Super Micro Computer's server production on efficient power systems and components. This decision has helped him become a billionaire today.

It is worth mentioning that the rapid rise of artificial intelligence technology in 2023 has become the hottest topic in the global technology industry, and the three key figures leading this wave, Huang Renxun, Su Zifeng, and Charles Liang, are all Chinese.

Unlike Huang Renxun and Su Zifeng, who studied abroad from a young age, the 65-year-old Charles Liang graduated from Taipei Institute of Technology, the predecessor of Taipei Tech, with a degree in electrical engineering. After graduating from Taipei Tech, Liang went to the United States for further studies and obtained a Master's degree in electrical engineering from the University of Texas at Arlington. In 1993, he founded Super Micro Computer in San Jose, California, where he currently serves as President and CEO.