"Super Micro Computer Inc. ( NASDAQ: SMCI) stock has its bullish supporters, some of whom feel it can withstand global trade issues and that it may be one of the best artificial intelligence (AI) stocks going forward. But it is also a target of short sellers, with more than 18% of shares held short. Last month, Supermicro reported a year-over-year increase in fiscal fourth-quarter revenue, but it fell short of expectations and the stock dropped afterward."
"AI stocks in general have felt the effects of trade war concerns, and Supermicro's margins have come under pressure. It aims to shrink its margins to increase production capacity to meet demand. Earlier in the year, the company said it was expanding its manufacturing capacity in the United States, Taiwan, and Europe to meet increasing demand, particularly for liquid-cooled data center solutions."
Super Micro Computer specializes in high-performance, high-efficiency servers and also provides software and storage systems for cloud computing, AI, 5G and edge computing. The company reported year-over-year fiscal fourth-quarter revenue growth but missed expectations, and shares fell; the fiscal year revenue reached a record $22 billion. Trade tensions and tariff concerns have pressured AI stocks broadly and weighed on Supermicro's margins. The company is reducing margins to expand production capacity and is increasing manufacturing in the United States, Taiwan, and Europe. The company announced collaborations and expanded Nvidia Blackwell Architecture solutions to Europe, aiming to capture rising AI data-center demand.
Read at 24/7 Wall St.
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