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Why Supermicro is mopping up the floor with the competition

Why Supermicro is mopping up the floor with the competition
Analyst Bio:

Super Micro Computer Inc. appears to be mopping up the floor with the competition in the market for AI-dedicated servers.

Last week, Supermicro SMCI, +2.01% announced preliminary results for its December quarter that smashed expectations. The San Jose-based computer and server maker has gained more share in the slower-growing server arena, thanks to its partnership in providing servers built with Nvidia Corp. NVDA, -0.26% graphics chips, and also because of one of its big, unnamed customers. Analysts believe that customer is Meta Platforms Inc. META, 0.95%. Last week, Meta CEO Mark Zuckerberg spoke in an Instagram post about plans to build more massive computer infrastructure to run generative AI, which includes 350,000 of Nvidia’s H100 chips.

Hans Mosesmann, an analyst at Rosenblatt Securities, said he believes one big attraction for customers is Supermicro’s ability to quickly deploy “liquid-cooled racks that uniquely fall into Supermicro’s area of expertise: fast, innovative, green, many SKU’s, U.S.-based, and Lego-like.” Liquid cooling, a technique once used mostly in the supercomputer industry, cools multi-rack servers in a more energy-efficient manner than air cooling.

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