videopokertable| It is expected that Taiman Ultramicro Computer Q1 revenue hit a new high, but fell 10% after the close

Science and Technology Innovation Board Daily, May 1 (editor Song Ziqiao) after disclosing the latest quarterly results, the US stock price of the ultra-micro computer, known as the "AI weather vane", sat after hours.VideopokertableA "roller coaster", rose briefly and then fell sharply, with the share price rising more than 9% at one point to falling more than 15% to less than $379 at one point. As of press time, the price of ultra-micro computers is down 10% after closing.Videopokertable.11%.

After the results were released on April 30, US Eastern time, revenue reached a record high in a single quarter, but it still fell short of expectations.

In the third quarter of fiscal 2024 (corresponding to the first quarter of 2024), net sales of ultramicrocomputers were $3.85 billion, below analysts' expectations of $3.86 billion, compared with $1.28 billion in the same period of the previous fiscal year.

However, adjusted earnings per share and gross margin exceeded market expectations: adjusted earnings per share were $6.65 in the third quarter, while analysts expected $5.58; gross margin in the third quarter was 15.6%, down from 17.7% in the same period last year, and analysts expected 15.3%.

In addition, ultramicrocomputers maintained a healthy cash flow, with operating cash flow of $1.52 billion in the quarter and total assets of $8.86 billion as of March 31, 2024, up from $3.67 billion the previous year.

Ultramicrocomputers also disclosed better-than-expected fourth-quarter and 2024 earnings guidance: fourth-quarter net sales are expected to be $5.1 billion-5.5 billion, higher than analysts' expectations of $4.73 billion, and fourth-quarter adjusted earnings per share are expected to be $7.62-$8.42. higher than analysts expected. Revenue for the full year of fiscal 2024 is expected to be $14.7 billion-15.1 billion, up from the company's forecast of $14.3 billion-$14.7 billion, and full-year adjusted earnings per share are expected to be $23.29-$24.09, about 8-10 per cent higher than analysts' expectations.

Charles Liang, chief executive of Ultra Micro computer, commented on the results that the company's revenue hit another record high in the third quarter, with revenue expected to grow 200 per cent year-on-year and adjusted earnings per share to rise 308 per cent in fiscal 2024, "much faster than its peers."

He also highlighted the strong pull of AI on the company's sales, "thanks to the strong demand for AI rack-scale plug and play (PnP) solutions and our team's ability to develop innovative DLC designs, the company's leadership in the AI infrastructure market has been expanded. At present, the company's customer base is growing strongly. Were it not for a shortage of key components, delivery would have been higher this quarter. We expect AI to maintain strong growth for many quarters, or even years, to come. "

David Weigand, chief financial officer of Ultra Micro computer, says the company's supply chain continues to improve.

▌ Wall Street analysts are bullish on a target price of more than $1000

The ultra-micro computer is deeply bound to Nvidia. The company specializes in high-performance servers, including servers, storage systems, network switches to software, for website servers, data storage and AI training, and is one of the top three server manufacturers in the world.

Nvidia is not only its main customer, but also an important performance booster.

Felix Wang, an analyst at Hedgeye, an investment research firm, has previously said that the biggest upward driver for ultramicro computers is the company's close cooperation with Nvidia, especially in building AI GPU-based servers. Wedbush analysts have previously said that the surge in sales of ultramicrocomputers is mainly due to a surge in demand for Nvidia GPU from big companies.

In the wave of artificial intelligence, ultra-micro computers have become famous with a strong increase of "ten times a year". In March, ultracomputers replaced Hewlett-Packard as a member of the S & P 500 index.

But as the artificial intelligence investment boom cools, the company's share price has fallen more than 30 per cent from a peak of $1229 to $858.8 now.

However, combining the ratings of ultra-minicomputers by more than three months of Wall Street analysts, they gave a target price of $940 to $1500, 70% higher than the current price ($858.8), with an average target price of $1193.56.

Among them, Rosenblatt Securities analyst Hans Mosesmann revised its target price from $700 to $1300 and maintained its buy rating. The analyst said that the key to the promising growth prospect of ultra-micro computers is the adoption of liquid-cooled server technology, which can cool high-speed AI computers. "liquid-cooled technology is critical to overcoming the challenge of AI cloud computing and can pave the way for ultra-large-scale cloud services."

JPMorgan Chase also took a positive view of the company, rating the ultra-microcomputer stock as "overweight" with a target price of $1150.

Goldman Sachs recently covered ultraminicomputers for the first time, with a target price of $941 and a rating of "neutral". According to the Goldman Sachs newspaper, ultramicro has been transformed into a leading artificial intelligence infrastructure company through long-term partnerships with major artificial intelligence component suppliers such as Nvidia, Ultra Micro Semiconductor and Intel, specializing in high-performance servers and storage systems.