Building the AI stack

We all know Super Micro Computer, a key player in the AI boom. Lately though, it’s made headlines for less flattering reasons, with reports its co-founder may have skirted export controls to smuggle chips to China. Not exactly the kind of “global expansion” investors love to hear about.

But the company looked to reset the narrative today: Super Micro beat on profits, issued solid guidance, and expanded gross margins from 6.3% to 9.9%. Revenue jumped 123% year over year but still came in below expectations, as some customers weren’t ready to take deliveries or deploy systems—pushing those sales into future quarters. Supply constraints also added pressure, with higher memory costs and shortages of GPUs and Intel processors weighing on results.

Underneath it all, Super Micro is moving beyond traditional server hardware toward full data center solutions. Its Data Center Building Block Solutions (DCBBS) segment is expected to drive over 25% of total profit in the coming years, up from just 4% in the December quarter.

The stock had been lagging, down about 5% on the year as of yesterday’s close—but surged 24.51% today, pushing it back into positive territory, up 18.38% YTD.

AMD joins the party

In another corner of the AI trade, AMD is putting up strong numbers of its own. The chipmaker beat on both the top and bottom lines, with revenue rising 38% year over year and data center sales jumping 57%.

Looking ahead, AMD expects about $11.2 billion in second-quarter revenue, topping forecasts. CEO Lisa Su significantly raised the company’s long-term outlook, now projecting server CPU market growth to exceed 35% annually, up from its prior 18% estimate.

That optimism reflects a subtle but important shift in AI demand. While GPUs (dominated by Nvidia) power model training, the rise of “agentic” and inference-heavy AI workloads is driving more demand toward CPUs—where AMD and Intel compete. Su now sees the server CPU market topping $120 billion by 2030, and plans to launch AMD’s first rack-scale AI system, Helios, later this year, with customers like OpenAI and Meta Platforms already lined up.

Investors liked what they heard: AMD jumped 18.64% today.

The rally isn’t over

Both stocks popped nicely today, and some analysts think there’s more room to run.

Seaport’s Jay Goldberg says AMD has locked in more capacity at TSMC, giving it a clear edge in a supply-constrained market. Meanwhile, Bernstein’s Stacy Rasgon models more than $14 in adjusted EPS by 2027 and nearly $20 by 2028, well above current consensus forecasts.

Meanwhile, KeyBanc analyst Brandon Nispel reiterated a Standard Weight rating on Super Micro, noting the company has seen no changes to its GPU allocations from Nvidia, and, based on current guidance, shows no clear financial impact from the recent smuggling allegations.

At the end of the day, the AI supply chain is starting to broaden: While Super Micro is pushing into full data center solutions, AMD is scaling its CPU business—both emerging as more serious competitors across the stack.—SY