Shares of Super Micro Computer rallied sharply in early trading Wednesday, extending gains from the previous session, as a combination of favourable analyst coverage, a multibillion-dollar AI infrastructure deal, and improved geopolitical sentiment lifted investor confidence in the server maker.
The stock opened more than 18% higher at $45.96, building on Tuesday’s 16% gain after news of a $20 billion partnership with Saudi-based data center company DataVolt.
SMCI’s AI deal with DataVolt boosts confidence
The company’s rapid ascent was driven in part by the announcement of a multi-year agreement with DataVolt to accelerate delivery of GPU platforms and rack systems for hyperscale AI campuses in Saudi Arabia and the US
The deal is estimated to be worth $20 billion, according to both firms.
The partnership was unveiled amid a four-day visit to the Middle East by US President Donald Trump, during which he signed a sweeping $300 billion deal with Saudi Arabia, with the stated goal of doubling that figure over the next four years.
The DataVolt-Super Micro pact aligns with a broader wave of AI and tech-focused investment from the Gulf state.
Analyst upgrade adds to momentum
Before the partnership was disclosed, analysts at Raymond James initiated coverage of Super Micro with an “Outperform” rating and a price target of $41.
The firm praised Super Micro’s position as “a market leader in AI-optimized infrastructure” and its competitive pricing.
Despite noting potential headwinds including tariffs and tech transitions, analysts highlighted artificial intelligence as a long-term growth driver.
Super Micro also announced that it had shipped a new range of high-density servers featuring Advanced Micro Devices’ latest EPYC 4005 series chips.
That development, coupled with growing interest in enterprise AI solutions, further boosted sentiment.
Stock rebounds but remains well off its highs
Despite the recent rally, Super Micro’s stock is still down more than 50% from its 52-week high, and nearly 63% off its record peak of $118.81 set in March 2024.
The company previously faced the threat of delisting from Nasdaq due to delayed financial filings and was flagged by auditor BDO for ineffective internal controls, casting a shadow over its reputation.
Raymond James acknowledged that reputational concerns may be suppressing the company’s valuation, but also emphasized that the firm’s fundamentals and strategic positioning in the AI server market are solid.
Chip sector sees broader gains during Trump’s Gulf visit
Super Micro’s rise was mirrored across the semiconductor space, as chipmakers such as Nvidia and AMD climbed around 3.3% each in premarket trade.
The rally followed announcements that Nvidia, AMD, and Qualcomm had signed agreements with Humain, a Saudi AI startup backed by the kingdom’s sovereign wealth fund.
President Trump’s visit to the Gulf region has so far resulted in commitments exceeding $600 billion from Saudi Arabia to US firms, fuelling hopes of an extended AI investment boom and closer tech cooperation between Washington and Riyadh.
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