Shares of the computer server maker Super Micro Computer Inc. rallied in late trading today after the company beat Wall Street’s targets with its second-quarter financial results and followed up with a stunning forecast that blew analysts’ targets out of the water.

The company reported net income for the quarter of $296 million, up from a profit of $157 million a year earlier. Earnings before certain costs such as stock compensation came to $5.59 per share, up 71% from a year earlier, while revenue surged 103%, to $3.66 billion. Both numbers far exceeded Wall Street’s guidance, with analysts forecasting earnings of just $5.05 per share on sales of $2.8 billion.

The solid earnings beat was expected, as Super Micro had preannounced those results on Jan. 18, sending its stock up 36%, to an all-time high of 496.78. However, it was the previously unannounced guidance for the third quarter that set the cat among the pigeons today.

Super Micro said it’s expecting earnings of between $5.20 and $6.01 per share in the current quarter, with sales forecast to hit between $3.7 billion and $4.1 billion. Both of those numbers far exceeded the analyst consensus estimates of $4.61 in earnings and $2.9 billion in revenue.

The company’s stock, which had already gained more than 4% during the regular trading session in anticipation of good news, rose 10% more in late-trading, just shy of the all-time high that was set earlier this month.

Super Micro President and Chief Executive Charles Liang (pictured) hailed the company’s record revenue growth during the quarter, saying this was thanks to high demand from existing end customers as well as new partners. “As our innovative solutions continue to gain market share, we are raising our fiscal year 2024 revenue outlook to $14.3 billion to $14.7 billion,” he added.

The full-year forecast is equally impressive, as analysts are targeting just $13.8 billion in sales. What’s more, Super Micro itself had forecast annual sales of only $10 billion to $11 billion when it kicked off its current fiscal year three months ago.

Super Micro manufactures a wide range of data center hardware, specializing in energy-efficient and application-optimized rack mount and blade servers. It also sells storage arrays to customers including enterprises that operate their own on-premises data centers as well as hyperscale cloud operators such as Amazon.com Inc., Microsoft Corp. and Google LLC.

It’s an extremely rare thing when a hardware vendor that already does billions of dollars in annual revenue manages to double its sales, said Holger Mueller of Constellation Research Inc.

“The driving force behind this growth is AI, as Super Micro provides some of the most reliable computing platforms for these workloads thanks to its partnership with Nvidia,” Mueller explained. “The good news for investors is that this trend is unlikely to change anytime soon. However, Super Micro still needs to do work on the profitability side of its business, as its costs keep rising and its earnings per share were down.”

Photo: Super Micro Computer