Super Micro Computer (SMCI) announced on Wednesday that it has released what it calls the “the industry’s most advanced 4-socket servers” made for large-scale databases and enterprise applications.
The servers, which are being powered by the latest Intel Xeon 6 Processors with Performance-Cores (P-Cores), are ideal for high-performance computing, mission-critical workloads, and in-memory databases.
The company – which is commonly known as Supermicro – said other applications that will benefit from the new servers are those requiring a large memory footprint with massive processing power, or scientific simulation applications that rely heavily on CPU computing with low latencies.
The 4-socket servers are meant to reduce complexity when creating a high-performance data center for enterprise applications such as AI, databases, analytics, business intelligence, and other workloads.
"These new 4-socket servers are addressing the needs of the most demanding enterprises worldwide, who require the simplicity and serviceability of a single system with up to 16TB of memory, and up to 6 double-width GPUs," Supermicro president and CEO Charles Liang said in a statement.
"With our DCBBS approach and worldwide production capabilities, Supermicro can now deliver complete data center solutions to customers in all geographies and is first-to-market for this segment.”
The company noted that the servers are certified for SAP HANA and Oracle Linux, allowing SAP and Oracle workloads to be scaled up in a single node without the latency of horizontally scaling across networks.
Meanwhile, energy infrastructure startup Digi Power X (DGXX) announced on Thursday that it had executed a purchase order with Supermicro for the latter’s NVIDIA B200-powered systems to enhance its NeoCloud AI infrastructure platform.
The Supermicro system will be deployed inside Digi Power X’s ARMS 200 (AI-Ready Modular Solution) pods. The first live deployment is expected to happen in the fourth quarter at the company’s Alabama site.
The company plans to deploy additional ARMS 200 pods at its Upstate New York locations.
Digi Power X’s stock gained 11% after announcing the deal with Supermicro.
BofA warns of headwinds
Despite the fact that Supermicro's stock has surged 73.1% YTD on the AI boom, Bank of America took a bearish stance on the shares in a note last week.
BofA analyst Ruplu Bhattacharya restarted coverage of the company with an “underperform” rating – and a $35 price target.
That target would imply a 40.1% drop from where the stock trades today.
Bhattacharya expressed concern about growing competition from legacy tech companies like Dell Technologies (DELL) and HP Enterprise (HPE). He also cited the potential for Supermicro to face shortages of critical components, including liquid cooling parts and high-end GPUs.
Supermicro has gained market share in the AI space through its advanced cooling technologies, but Bhattacharya expects to see rivals become more competitive with this tech offering.
He projects Supermicro’s gross margin to decline from 11.3% to 9.4% by FY27.
The U.S. Justice Department opened a probe into Supermicro in September after activist short-seller Hindenburg Research published a report in August saying that it found "glaring accounting red flags, evidence of undisclosed related party transactions, sanctions and export-control failures, and customer issues," as The Wall Street Journal reported.
Ernst & Young, which had served as Supermicro's auditor, then quit in October, raising concerns over the company's corporate governance, accounting practices and the board's independence from Liang.🖥️ Supermicro (SMCI) Flexes 4-Socket Powerhouse — But BofA Says It’s a Trap
Bhattacharya cited these ongoing legal concerns and questions about the company’s internal controls as further reasons for his bearish take on Supermicro’s stock.
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