Super Micro Computer (NASDAQ: SMCI) stock is making big gains in Thursday’s trading. The company’s share price was up 10% as of 12:45 p.m. ET, according to data from S&P Global Market Intelligence.
While there wasn’t any business-specific news for the company, strong earnings for Broadcom (NASDAQ: AVGO), promising developments for Oracle, and continued momentum for artificial intelligence (AI) stocks are powering big gains for Super Micro’s share price today. The high-performance server specialist’s stock is now up more than 200% year to date.
Broadcom’s big quarter flashes buy signals for Super Micro stock
High-profile AI stocks have frequently traded in tandem with each other this year. When one company posts better-than-expected earnings results or secures a major new contract or partnership, that has often been enough to power substantial gains for other players in the space. On the heels of Broadcom’s better-than-expected quarterly results, Super Micro Computer stock appears to be benefiting from that dynamic.
Broadcom, a connectivity semiconductor and software company, posted better-than-expected quarterly sales and earnings performance after the market closed yesterday. The tech specialist reported non-GAAP (adjusted) earnings per share of $10.96 on sales of $12.49 billion for the second quarter of its current fiscal year, which ended May 5. Revenue was up roughly 43% year over year in the period, with rising demand for AI-related technologies helping to spur growth. Meanwhile, the average analyst estimate had called for the business to post adjusted per-share earnings of $10.84 on sales of $12.01 billion. In addition to posting sales and earnings beats, the company also raised its full-year performance outlook.
Oracle’s promising guidance presents another buy signal
Broadcom’s beat-and-raise quarter came on the heels of a promising report from Oracle earlier in the week. While Oracle’s quarterly sales and earnings performance actually came in lower than Wall Street had expected, the company’s management issued very encouraging guidance.
In particular, Oracle looks to be scoring significant wins in AI and the cloud infrastructure market. Because Super Micro is a provider of high-end rack servers used for artificial intelligence, data centers, and other accelerated computing applications, good news for Broadcom and Oracle this week also bodes well for Super Micro stock.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Oracle. The Motley Fool recommends Broadcom. The Motley Fool has a disclosure policy.
Why Super Micro Computer Stock Is Surging Today was originally published by The Motley Fool
Source: finance.yahoo.com