Strong demand for AI infrastructure is continuing to support server makers, with Super Micro Computer shares rising sharply after the company issued a quarterly revenue and profit margin forecast above market expectations.
Shares of the AI server manufacturer climbed 12.7% to $36.69 in premarket trading on Wednesday.
Super Micro expects revenue for the 1st quarter to reach between $18.5 billion and $19.5 billion, well above analysts’ estimate of $15.23 billion, according to data compiled by LSEG. The company also raised its expected profit margin range to 12%–12.5%, compared with earlier market expectations of 10.4%–10.8%.
The forecast reflects continued investment in data centres as companies race to expand their AI capabilities. Microsoft, Google, Amazon and Meta are expected to spend more than $700 billion on AI infrastructure this year.
The positive outlook also lifted other server manufacturers. Dell and Hewlett Packard Enterprise each gained more than 4% before the market opened.
However, investors remain focused on whether rising AI investments will deliver sustainable returns. “Investors are likely to focus on whether strong performance in core businesses can continue to support elevated AI investment,” said strategists at UBS Global Wealth Management.
The brokerage added that comments from major AI companies on spending, profit margins and returns will be closely examined to determine whether the current AI capital expenditure cycle can be justified.
Concerns over profitability are also affecting data centre operators. Some companies have been taking on debt to finance infrastructure expansion as borrowing costs rise.
CoreWeave, a heavily indebted data centre operator, was at the centre of a selloff last week that also affected AI-related stocks. The episode has added to market concerns about the financial risks linked to the rapid expansion of AI infrastructure.
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