Super Micro shares jump 12% after Q1 preliminary results top estimates. Can the AI server maker sustain its recovery?
A Ksheerasagar
Super Micro Computer surged 12.3% in pre-market trading on Wednesday, October 21, hitting $36.46, after the server maker released preliminary first-quarter fiscal 2027 results on October 20 that far exceeded expectations, driven by relentless demand for AI data centres.
The company forecast first-quarter revenue of $18.5 billion to $19.5 billion, well above analysts’ expectations of $15.23 billion, according to data compiled by LSEG. It also expects profit margins to range between 12% and 12.5%, compared with earlier expectations of 10.4% to 10.8%.
Super Micro has benefited from surging demand for equipment used to train and run AI workloads. Its servers are equipped with Nvidia Corp. chips, which have become the preferred components for a large share of AI data centres.
Microsoft, Google, Amazon and Meta are expected to spend more than $700 billion on AI infrastructure this year, underscoring the scale of investment in the sector. Other server makers, Dell and Hewlett Packard Enterprise, also gained 5.2% and 4%, respectively, before the bell.
“Investors are likely to focus on whether strong performance in core businesses can continue to support elevated AI investment,” strategists at UBS Global Wealth Management said. The brokerage added that commentary from AI giants on spending, margins and returns would be closely scrutinised to determine whether the AI capital expenditure cycle can be justified, Reuters reported.
Markets have recently grown concerned about the profitability of data centre operators, many of which have been issuing debt to finance their expansion at a time when borrowing costs are rising.
Super Micro said it would discuss the results during a conference call scheduled for November 3. The company did not provide a reason for announcing the preliminary results ahead of its scheduled reporting date.
Earlier in March, the stock came under heavy selling pressure amid a probe into allegations that a co-founder and two others had illegally diverted billions of dollars’ worth of servers to China in violation of US law.
Super Micro shares have staged a strong recovery from their March lows, rising 64% to around $32 apiece based on Tuesday’s closing price. Despite the rebound, the stock remains significantly below its record high.
Between November 2025 and March 2026, Super Micro shares came under sustained selling pressure, declining 56% over the period.
Even after the recent rally, the stock is still trading nearly 74% below its all-time high of $122.90, reached in March 2024. Before that, the company enjoyed a spectacular bull run between February 2023 and March 2024, with its shares delivering a return of nearly 1,300%.
(With inputs from Bloomberg, Reuters)
A Ksheerasagar
Ksheera Sagar has been working as a Market Research Analyst at LiveMint for the past four years, covering stocks, commodities, and broader financial markets. In this role, he closely tracks daily market movements, corporate earnings, sector trends, and macroeconomic developments. <br><br> He has over a decade of experience in the financial services industry and has previously worked with multiple organisations, including global investment bank J.P. Morgan, bringing strong research experience into the newsroom. <br><br> During his career, he has gained extensive exposure to equity research, market analysis, and financial data interpretation, strengthening his expertise across asset classes and market cycles. <br><br> He is known for his data-driven analysis and crisp, listicle-style market stories that break down complex financial developments across key markets for a wide audience. His strong research skills enable him to write detailed and insightful stories on stocks and sectors, focusing on the underlying factors driving market movements. <br><br> His work combines quantitative insights with clear storytelling, presenting financial developments in a clear and structured manner. Moreover, he enjoys writing multibagger and listicle-style copies. Outside of work, Ksheera enjoys playing the piano and exploring new places. He has a keen interest in travel, music, and continuously learning about global markets and economic trends.
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