Three of the biggest names in logic chips closed higher on August 12, following a strong earnings report deep in the AI server supply chain. Advanced Micro Devices, Inc. (NASDAQ:AMD) up 1.8% at $483, Intel Corporation (NASDAQ:INTC) up 3.3% to $101, and NVIDIA Corporation (NASDAQ:NVDA) up 3% to $224, in a broad rally sparked not by news from any of the three companies, but by Super Micro Computer Inc. (NASDAQ:SMCI), whose results reinforced how strong AI infrastructure expenditure remains. On August 11, Super Micro Computer Inc. (NASDAQ:SMCI) released its fiscal fourth-quarter report, and the results were impressive on two fronts.
Non-GAAP earnings per share came in at $1.70, up 139% from the roughly $0.71 analysts projected, though revenue of $11.12 billion fell just short of expectations. The major story, however, was the order book: Super Micro reported more than $60 billion in new orders received during the quarter alone, up more than 50% compared to the $39 billion the company reported just six weeks prior. The margin story was equally as important as order growth.
Super Micro's non-GAAP gross margin increased to 17.6%, more than doubling the previously forecast 8.2%-8.4% range, which management put down to a better mix of customers and products. That's why the rise extended far beyond Super Micro's own shares. For NVIDIA Corporation (NASDAQ:NVDA), whose GPUs power the servers Super Micro builds, the order surge acts as an independent data point confirming that demand for its chips continues to be strong ahead of its own upcoming fiscal second-quarter report, which includes revenue projections of roughly $91 billion excluding China data-center compute.
NVIDIA enters that report up 19.23% year-to-date, has a $80 billion share buyback authorization, and recently announced a $500 billion financing arrangement with a broad collection of Wall Street banks. Advanced Micro Devices, Inc. (NASDAQ:AMD), which is up a staggering 130.08% year to date, has its own reasons to gain something from the read-through. The company has been securing major GPU deployment orders, including contracts for up to 2 gigawatts of its MI450 accelerators for Anthropic, establishing itself as the most credible competitor to NVIDIA in AI data center silicon.
A robust server-supply-chain signal, such as Super Micro's, lends credibility to the broader notion that there is enough demand for AI infrastructure to support several chip suppliers. Meanwhile, Intel's participation in the rally highlights a different dynamic. Rather than competing directly for AI training workloads, Intel Corporation (NASDAQ:INTC) could benefit through its role as a key CPU supplier to AI server systems: its server CPUs, especially the Xeon series, function as host processors integrated within the massive GPU systems that companies like Super Micro design and sell.
A rise in Super Micro's order book indicates that Intel's estimated CPU attach volume will increase, even if Intel does not win any AI-specific silicon contracts. Institutional positioning in Super Micro Computer Inc. (NASDAQ:SMCI) showed increased smart-money interest prior to the print. According to Insider Monkey's filing data, hedge fund ownership increased from 39 funds in Q4 to 49 funds in Q1.
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