Shares of Dell Technologies and HPE jumped on Wednesday after Super Micro Computer, another server maker, released an earnings update that lifted confidence in the AI infrastructure sector.
On Tuesday night, Super Micro said it now expects its fiscal fourth-quarter gross margins to be between 15% and 17%. This is about twice as high as its earlier forecast of 8.2% to 8.4%.
Wedbush said the big increase probably shows that demand for AI-powered servers is still strong while supply is limited, which lets Super Micro charge higher prices. The firm also believes Super Micro used this situation to offer more expensive products and encourage customers to buy a wider range of servers.
Super Micro shares jumped 25%, which puts them on track for their biggest one-day gain since December 2, 2024, according to Dow Jones Market Data. The rally also lifted other companies in the sector, with Dell shares up 10% and HPE shares rising 5.6%.
Wedbush said that if its reading of Super Micro’s early announcement is correct, other companies like Dell, HPE, and Gigabyte could see similar benefits. So far this year, Dell shares have climbed 253% and HPE shares are up 105%, as investors expect strong demand for AI-powered servers to continue. Super Micro’s early results supported this outlook for many on Wall Street.
