Super Micro Stock Soars: The AI Boom Fueling This Week’s Rocket Ride

Another week, another tech stock defying gravity—this time it's Super Micro's turn.

The server upstart rode the AI hype wave to double-digit gains, leaving Wall Street's skeptics scrambling. No surprise—when Nvidia sneezes, the whole sector catches a gold rush.

Behind the surge: Hyperscalers stuffing data centers with Supermicro's liquid-cooled rigs. Because nothing says 'efficiency' like dumping billions into power-hungry AI infrastructure.

Meanwhile, hedge funds pretend they saw this coming all along. Funny how that works.

Image source: Getty Images.

AI capital spending keeps increasing

Quarterly reports from big tech companiesandthis week confirmed that not only is capital spending for AI compute power continuing, but investments are growing.

Microsoft CEO Satya Nadella commented, "Cloud and AI is the driving force of business transformation across every industry and sector." Supermicro is benefiting from that trend. Microsoft CFO Amy Hood told investors on Microsoft's conference call that while more than half of capital spending in the quarter was for long-lived assets, the balance was "primarily for servers, both CPUs and GPUs, and driven by strong demand signals."

She added that capital spending in the current quarter will rise to a record of over $30 billion, based on strong cloud and AI demand signals. Expand those business conditions across the tech sector, and one can see why investors are buying Supermicro stock. Shares have doubled year to date as the business grows and accounting issues from last year are in the rearview mirror.

This week, Digi Power X, a small AI and digital infrastructure company, announced plans to scale a new platform at its flagship Alabama data center site. The site contains over 10,000GPUs, and the platform was developed exclusively with Supermicro.

That's just one example of the many ongoing data center projects. Supermicro will be a supplier to some of them, and should see its sales continue to expand. Investors are buying into the stock this week as the big tech companies reassure that data center spending is still thriving.