Super Micro Computer Inc (SMCI) shares are having a strong day on Thursday, climbing as the broader market also gains—the Nasdaq is up 0.87% and the S&P 500 has added 0.78%. But SMCI's move is about more than just a rising tide.
Retail traders are zeroing in on a notable drop in short interest. According to recent data, short interest fell from 86.79 million shares to 80.58 million shares. That still leaves 17.73% of the float short, but it's a meaningful decline. It would take about 2.89 days for shorts to cover their positions, based on average daily volume of 27.89 million shares. When short interest drops like this, it often signals that bears are throwing in the towel—and that can add fuel to a rally.
Earnings Beat Sparks Optimism
The real catalyst, though, was Super Micro's blowout third-quarter earnings report. The company reported adjusted earnings of 84 cents per share, crushing the consensus estimate of 62 cents by a whopping 35.48%. Revenue came in at $10.24 billion, which missed the $12.33 billion estimate, but the bottom-line strength caught Wall Street's attention. Global demand remains robust, with Rest of World revenue growing nearly 500% year over year.
AI Infrastructure Dominates Revenue
AI is still the main engine for this hardware giant. Over 80% of quarterly revenue came from AI GPU-related platforms. Super Micro is scaling fast to meet that demand, expecting production capacity to exceed 6,000 high-performance racks per month. The company maintains deep ties with NVIDIA Corp (NVDA), Advanced Micro Devices, Inc. (AMD), and Intel Corp (INTC).
Guidance Ahead of Estimates
Looking ahead, management issued an upbeat fourth-quarter outlook. They forecast adjusted EPS between 65 cents and 79 cents, well above the 55-cent analyst consensus. Revenue is projected to reach up to $12.5 billion. That forward guidance suggests the company sees the momentum continuing.
Critical Technical Levels for SMCI Stock
From a technical perspective, SMCI has reclaimed some key moving averages. It's trading 11.5% above the 20-day SMA, 18.9% above the 50-day SMA, and 12.5% above the 100-day SMA. The bigger hurdle is the long-term trend: shares are still 10.5% below the 200-day SMA. The moving-average structure is mixed—the 20-day SMA is above the 50-day SMA (a bullish near-term crossover), but the 50-day remains below the 200-day, reflecting the death cross that formed back in December.
Key levels to watch: resistance at $33.50 and support at $28.50.
At the time of publication on Thursday, Super Micro Computer shares were up 2.06% at $32.67.
