Super Micro Computer Inc’s lengthy rally came to a shuddering halt on Friday, with a selloff that derailed what had looked to be the server maker’s best week on record.
Shares fell 20 percent, their biggest one-day percentage drop since August last year. The decline comes in the wake of a nine-session run of gains, the longest such streak for the stock since 2016. However, even with the day’s selloff, the stock rose 8.5 percent for the week.
Despite Friday’s drop, recent gains show how Super Micro has become one of the hottest names in artificial intelligence (AI). The stock has risen in 18 of the past 21 sessions and remains up 183 percent this year. That follows a gain of 246 percent last year.
Photo: Bloomberg
Along with the rally, chief executive officer Charles Liang (梁見後) has seen his wealth quadruple this year to US$7.8 billion, making him the biggest percentage gainer on the Bloomberg Billionaires Index of the world’s 500 richest people.
“We deliver the best generative AI platform in the world,”
Liang said in an interview on Friday when asked whether the company was fairly valued. He added that the company could hit US$25 billion in revenue — if only it had enough semiconductors.
“There is a chip shortage — once we have more supply from the chip companies, from Nvidia, we can ship more to customers,” Liang said.
The company generated US$7.1 billion in revenue for the last fiscal year, and it is projected to make US$14.5 billion this fiscal year, according to data compiled by Bloomberg.
The San Jose, California-based company has become a darling for investors wanting exposure to AI and the infrastructure such as chips and servers that run AI applications.
Recent interest in the stock came after preliminary quarterly results released last month far exceeded expectations, and the company subsequently raised its revenue forecast.
The recent rally had pushed Super Micro’s market valuation to about US$45 billion, and its weighting in the Russell 2000 Index is the largest single stock weighting the index has seen going back to 1999, Bloomberg Intelligence said.
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