Super Micro Shares Surge on Cooling Technology Expectations

Investing.com -- Super Micro Computer (NASDAQ:SMCI) shares rose 5% following a positive assessment regarding the company's liquid cooling technology outlook. Lynx Equity highlighted that the NVDA keynote at CES serves as a positive catalyst for Super Micro Computer, emphasizing the company's leading position in liquid cooling technology necessary for next-generation platforms.

According to Lynx Equity, the NVDA presentation at CES is expected to address the upcoming GB300 platform, which is anticipated to require more advanced cooling solutions than its predecessor, the GB200. Super Micro's early leadership in liquid cooling is seen as a significant competitive advantage that is not expected to diminish in the near future. An analyst from Lynx Equity commented, "The core element of our positive thesis on SMCI is our belief that the company is a step ahead of its competitors in liquid cooling technology and is not at risk of losing that position in the foreseeable future."

The analyst firm also noted Super Micro's potential to benefit from other industry developments requiring liquid cooling solutions, such as AMD's MI325X cycle and Google's TPU6 increase. Super Micro's history with Google's liquid-cooled data centers is seen as the foundation of the company's ongoing importance in this growing market segment.

Despite the optimism, Lynx Equity acknowledges the speculative nature of Super Micro's stock and highlights uncertainties surrounding the company’s ability to meet regulatory filing requirements in the upcoming two-month period. Last month, the stock experienced a wave of selling due to news suggesting the company might be seeking private equity funding, though this was not confirmed by Super Micro. Lynx Equity suggests that such a move could unsettle shareholders but posits that the capital influx could be necessary to finance inventory management and the capital-intensive expansion of the AI server business.

In summary, while Super Micro faces challenges and potential volatility in the short term, the NVDA keynote at CES is described as a positive event that could highlight the company's strong position in the liquid-cooled data center technology market.