💰 AI Server Giant Eyes $40B Revenue Ahead!
Welcome, AI & Semiconductor Investors,
Supermicro’s latest preliminary results highlight a surge in AI server demand and reaffirm a sky-high $40B revenue ambition for 2026.
Stay tuned to learn how GlobalFoundries powered through a challenging environment with strong Q4 earnings and what TrendForce’s latest AI server forecast reveals about 2025 market twists.— Let’s jump in!
What The Chip Happened?
💰 AI Server Giant Eyes $40B Revenue Ahead!
📶 Soaring Through Challenges: GF Delivers Strong Q4 Results
🔀 TrendForce's AI Server Outlook: 2025 Growth Twists Await
Read time: 7 minutes
Supermicro (SMCI)
💰 AI Server Giant Eyes $40B Revenue Ahead!
What The Chip: Supermicro just released its preliminary Q2 FY2025 results, showing strong AI server demand despite a revision of revenue guidance. Management reaffirmed ambitions for continued high growth—pointing to new liquid-cooling tech and a $40 billion revenue target for fiscal 2026.
Details:
🤖 Massive Sales Surge: Preliminary Q2 revenue came in between $5.6B and $5.7B, representing about 54% year-over-year growth at the midpoint.
🌐 Updated Guidance: Fiscal 2025 revenue guidance narrowed to $23.5B to $25B (down from $26–$30B), reflecting product cycle transitions and 10-K filing delays.
💧 DLC (Direct Liquid Cooling) Momentum: Founder & CEO Charles Liang sees over 30% of new data centers adopting liquid-cooling in the next 12 months, citing “…our leading direct-liquid cooling technology positions us to grow AI infrastructure design wins.”
🏗 Data Center Building Block Expansion: Supermicro is ramping global manufacturing—including Malaysia, Taiwan, and Europe—to deliver fully integrated infrastructure solutions that promise quicker time-to-deployment and up to 40% lower TCO.
💰 Profitability & Debt: Preliminary Q2 non-GAAP EPS of $0.58–$0.60 (up ~5% year-over-year) and a new $700M convertible note issuance strengthen Supermicro’s balance sheet as it pursues future expansion.
⚠️ Bearish Points: The company is still working to file delayed SEC reports by Feb 25. Subpoenas from the SEC/DOJ and short-seller allegations have created uncertainty, though management believes the claims lack merit.
🚀 Eyes on Fiscal 2026: Despite near-term revisions, Charles Liang remains bullish: “We anticipate this technology transition sets a strong foundation for us now, resulting in FY25 revenue … paving the way for $40 billion revenue in FY26.”
Why AI/Semiconductor Investors Should Care: Supermicro’s liquid-cooling leadership and rack-scale “one-stop shop” approach signal a continued push in data center hardware. Even with regulatory and reporting hurdles, the impressive AI-driven revenue growth and the bold $40B FY26 target underscore the broader AI infrastructure boom—offering significant potential (and some risks) for tech-focused investors.
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GlobalFoundries (GFS)
📶 Soaring Through Challenges: GF Delivers Strong Q4 Results
What The Chip: GlobalFoundries just posted its Q4 and full-year 2024 numbers, beating midpoint guidance on revenue, margin, and earnings. Despite a tricky macro and an industry-wide inventory reset, GF generated over $1 billion in Non-IFRS adjusted free cash flow for the year, continuing to expand its “essential chip technologies” footprint.
Details:
🔋 Auto Growth on Overdrive: Automotive revenue jumped a record 15% for all of 2024, hitting the $1 billion-plus milestone. Management says content growth and sole-source design wins are driving market share gains.
📶 Diversifying in Malta: GF recorded a $935 million impairment to shift legacy Malta capacity into newer platforms like 22FDX and advanced packaging. CEO Dr. Thomas Caulfield explained, “2024 presented a unique set of challenges for our industry, but thanks to our focus on operational excellence, we generated over $1 billion of Non-IFRS adjusted free cash flow.”
🏭 Strong Q4 Finish: Q4 revenue hit $1.83 billion (down just 1% year-over-year), Non-IFRS operating margin was 15.6%, and the team says free cash flow momentum looks solid for 2025.
💸 Capital Efficiency: CapEx was just 9% of 2024 revenue, with management targeting $700 million in net CapEx this year. With the big fab investments largely in place, GF expects to leverage existing capacity for growth.
🛰️ Data Center & SatComm Opportunities: GF sees renewed demand for optical transceivers, AI accelerators, and satellite communications in 2025. Partnerships (like one with Lightmatter) emphasize photonics integration for next-gen AI data centers.
🌐 Global Partnerships Pay Off: The new Advanced Packaging and Photonics Center in Malta, NY, supported by grants, will help GF serve growth in AI, automotive, and aerospace—domestic manufacturing remains a key theme for customers.
📊 Guiding Up: GF expects revenue of $1.55-1.60B for Q1 2025 and targets hitting around 30% gross margin by year-end, suggesting continued improvement as utilization ramps.
Why AI/Semiconductor Investors Should Care: GlobalFoundries’ strategic push into automotive, photonics, and RF technologies—paired with its global footprint—is fueling market share gains, especially in the face of supply chain reshoring. The $1B+ in free cash flow underscores its capital-efficient approach, a critical advantage in choppy macro conditions. As AI, automotive electrification, and satellite connectivity accelerate, GF’s “essential chip” platforms look poised for sustained expansion.
AI Servers
🔀 TrendForce's AI Server Outlook: 2025 Growth Twists Await
What The Chip: TrendForce’s latest data shows a 46% surge in global AI server shipments during 2024. However, looming factors—like U.S. chip restrictions, potential rollout snags for GB200/GB300 racks, and the disruptive “DeepSeek effect”—may shape the 2025 growth trajectory.
Details:
🤔 Base Case—Steady Growth: TrendForce forecasts a ~28% YoY hike in AI server shipments in 2025 if Microsoft, Meta, Amazon, and Google follow through on increased AI and cloud capex. One TrendForce analyst notes, “CSPs remain committed to AI investments that will maintain solid market momentum.”
⛔ Worst Case—Stricter Regulations: Stricter U.S. export regulations on advanced AI chips to China could cap growth at 20-25%. Testing delays for higher-spec GB300 racks and the rising popularity of cost-effective DeepSeek AI solutions also pose downside risks.
💡 Bullish Scenario: Proactive AI policies from the U.S. (e.g., the Stargate Initiative) and China could turbocharge AI spending. TrendForce anticipates potential expansion in edge AI applications, lifting AI server shipment growth to ~35%.
🔀 DeepSeek’s Impact: The drive toward proprietary, lower-cost ASIC solutions is accelerating a shift from AI training to AI inference. TrendForce projects AI inference servers could account for nearly half of the total AI server market as enterprises look for budget-friendly alternatives.
Why AI/Semiconductor Investors Should Care: AI servers are a major revenue driver for semiconductor players, but rapidly shifting market forces—like regulatory decisions and evolving tech stacks—pose both opportunities and risks. As CSPs weigh ASICs vs. GPU-centric architectures, the competitive landscape could reshape supply chains and valuations, making careful monitoring vital for AI-focused investors.
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Disclaimer: This article is intended for educational and informational purposes only and should not be construed as investment advice. Always conduct your own research and consult with a qualified financial advisor before making any investment decisions.
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[Paid Subscribers] Supermicro Delivers Strong Q2 2025 Preliminary Results, Eyes $40B Mark
Executive Summary
Super Micro Computer, Inc. (Supermicro), a provider of total information technology (IT) solutions for artificial intelligence (AI), cloud, storage, and 5G/edge deployments, released its preliminary financial information for the second quarter (Q2) of fiscal year (FY) 2025 ended December 31, 2024. The company reported robust year-over-year growth in net sales, strong adoption of liquid-cooled AI server solutions, and a commitment to expanding global manufacturing capacity. Notably, management highlighted Direct-Liquid Cooling (DLC) as a key differentiator, with more than 30% of new data centers expected to adopt the technology in the next 12 months. Founder, President, and Chief Executive Officer (CEO) Charles Liang projected the potential for FY25 revenue to reach between USD 23.5 billion and USD 25 billion, laying a foundation for a possible USD 40 billion in FY26.
Growth Opportunities
Supermicro’s growth trajectory is closely tied to the upswing in AI and high-performance computing (HPC). During the quarter, management emphasized how the rapid evolution of AI workloads—training large language models and complex data analytics—continues to demand greater computing capacity from enterprise and hyperscale customers. Central to Supermicro’s expansion strategy is its close partnership with NVIDIA Corporation. By leveraging the latest NVIDIA Blackwell GPU architecture, Supermicro aims to offer specialized servers designed to handle new HPC and enterprise AI workloads.