SMCI is included in the S&P 500 index this week
Endowed competitiveness with the rapid release of customized servers
SMCI-NVIDIA interdependencies also noted
Similar to NVIDIA’s launch and start-up years
| Yonhap News |
NVIDIA is dominating as the AI leader and showing an incredible rise in stock prices. However, in a similar sector of Wall Street, the server manufacturer company and a client of NVIDIA, Super Micro Computer Inc’s (SMCI) stock price has risen higher than NVIDIA. These two companies have become significantly intertwined in the AI boom with noteworthy aspects since the founders are Taiwanese Americans, and the founding years are the same.
The Wall Street Journal (WSJ) reported on the 17th (local time) that SMCI, whose stock price has risen more than 12 times in the past year, will be included in the S&P500 index on the 18th. WSJ stated, “SMCI’s company revenue is expected to double this year as servers equipped with NVIDIA AI chips are selling explosively,” and “If included in the S&P500, it will become the stock with the best performance in the index over the past year.” NVIDIA’s stock price rose more than four times during the same period.
SMCI is a company that produces big data, cloud computing, 5G, and other app servers. Recently, it has been particularly notable for its servers used in data centers. SMCI’s strength lies in its flexibility in assembling servers in an almost infinite configuration to suit various uses. The WSJ reported, “The server settings desired by autonomous vehicle technology developers and giant language model (LLM) developers like ChatGPT are different,” and “SMCI can provide custom infrastructure for both.”
| Source: Bloomberg |
While the SMCI server installs AI chips supplied by NVIDIA, the interdependent relationship between the two companies has gathered attention recently. NVIDIA and SMCI were established in 1993, and Jensen Huang, the CEO of NVIDIA, and Charles Liang, the CEO of SMCI, both come from Taiwan. After graduating from National Taiwan University, CEO Liang moved to the United States and worked in the IT industry before founding SMCI. He told the WSJ, “I have known CEO Huang for decades,” and “SMCI’s headquarters in San Jose and NVIDIA’s headquarters in Santa Clara are a 15-minute drive apart.” SMCI could profit by holding over a billion dollars of NVIDIA’s inventory and could secure AI chips stably even when NVIDIA’s products were in short supply.
A scene that succinctly showed the relationship between the two companies was a keynote session at the Computex conference held in Taiwan last May. CEOs Huang and Liang stood side by side as speakers. At that time, CEO Liang said that the server release schedule depended on the supply of NVIDIA’s chips. CEO Huang replied, “The server release is up to you,” and Liang responded, “Give us more chips.”
Meanwhile, experts differ on SMCI’s future performance and stock price outlook. Firstly, as the AI accelerator market is expected to grow to 400 billion dollars by 2027, according to AMD, server demand is also expected to surge in parallel. The WSJ reported, “It is expected in the market that SMCI’s competitors will find it difficult to release new products so quickly,” and “SMCI plans to increase its market share by doubling AI and advancing server releases.” On the other hand, Matthew Bryson, an analyst at Wedbush Securities, pointed out, “There has never been a company that has occupied more than 30% of the server market share in history,” and “There is no reason why competitors like Dell can’t do exactly what SMCI does.”
Most Commented