In a word, the stock price plummeted by 23%
Pencil Road Author丨Huang Xiaogui
There is no good news, and sometimes that is bad news in itself.
On Friday, Supermicro Computer said that it would release its third-quarter earnings report on April 30. It just sent a notice, and it didn't say what the financial report was, whether it was good or bad.
But the stock price plummeted 23.14%.
Wall Street, in its view, says nothing good is true: either it has just met expectations or it is below expectations.
Some analysts have said that Supermicro Computer has announced its upcoming earnings report in the past eight times, and seven times have reported better-than-expected earnings before the release.
Meaning: Every time you had something good before, you couldn't hold back and say it in advance, but this time it's probably not a good thing if you don't say it in advance.
Supermicro's second-quarter revenue was $3.66 billion, up 103% year-over-year. Previously, net revenue for the third quarter was expected to be $3.7 billion to $4.1 billion.
However, despite the sharp decline, Supermicro Computer's share price is still up more than 150% this year and more than 550% in the past 12 months.
Supermicrocomputer's stock price plummeted that day, and it also affected its "father" Nvidia. Nvidia shares also fell 10%.
Why is ultracomputer NVIDIA's "pro-son", and what is its relationship with generative AI?
NVIDIA's GPU is not simply connected by wires, but is a group of several pieces, plugged into the rack of an ultra-micro computer, equipped with other parts to make a server, and sold to customers such as OpenAI, Google, Microsoft, and Meta for the training of large language models or cloud computing.
Or Microsoft has tens of thousands of GPUs on hand, and asks a supermicro computer to come to the door to assemble a room of GPUs together and make rows of servers.
The racks of ultramicro computers can be made into servers for different scenarios, such as chips from NVIDIA, as well as chips from Intel and AMD. The performance of the server made with the ultra-micro computer rack is stable, and the combination runs smoothly.
The ultra-micro computer also has a unique liquid cooling technology, which reduces the power consumption of the GPU and allows enterprises to greatly save costs. Some analysts have pointed out that with the large number of GPUs required for generative AI and the high level of heat generation, next-generation data centers must be cooled by liquid cooling instead of air cooling.
The reason why Supermicrocomputer is called Nvidia's "pro-son" is also because the relationship between the founders of the two companies, Jensen Huang and Liang Jianhou, is extraordinary, and Supermicrocomputer can give priority to buying Nvidia's GPU, so that Supermicrocomputer's products are bought off the production line. In the second fiscal quarter of 2024, Supermicro's revenue doubled year-over-year to $3.66 billion — half of which went to AI.
Born in Chiayi County, Taiwan Province in 1958, Liang graduated from Taipei Institute of Technology in 1978 with a degree in Electrical Engineering (a five-year junior college) and later received a bachelor's degree in electrical engineering from the Taiwan Institute of Technology and Technology. In 1984, he went to the United States to study and received a master's degree in electrical engineering from the University of Texas at Arlington.
After that, Liang Jianhou worked as a senior engineer and project leader at C&T, a major display chip manufacturer, and Suntek, a major software manufacturer. In 1991, he served as President and Chief Engineer of Micro Center Computer, Inc., a motherboard design and manufacturing company. In 1993, he and his wife Liu Qiuzhu founded Supermicro Computer in San Jose, California, USA.
In 1995, the world's first server motherboard that could be plugged into two CPUs, later launched a motherboard that could plug in four CPUs, and later launched a motherboard that could operate with both CPU and GPU.
In 2004, Liang cut more of the company's business and focused on more energy-efficient server systems. It is said that after watching the disaster movie "The Day After Tomorrow" with his children, he suddenly thought: What can he do with global warming? Liang Jianhou often said: There is only one Mother Earth.
In 2007, Supermicro Computer was listed on the NASDAQ.
In 2009, Supermicro launched an epoch-making product: a super server rack with multiple GPUs. Ultramicrocomputers can take a few bites of cream in today's generative AI pie, and the foundation was laid back in 2004 and 2009.
Today's supermicro computer server racks can be spliced together on a large scale like Lego bricks, equipped with power supplies, heat dissipation modules, motherboards, and chassis. As many chips as customers have, the supermicro computer can customize the corresponding server racks to carry them, and the samples can be submitted in one month.
In 2018, Supermicro won the order to build Intel's data center. Supermicro Computer estimates that Intel can save $13 million a year on electricity bills by purchasing their products.
During this period, the supercomputer thoroughly understood the principle of the liquid cooling system used in the supercomputer and applied it to the server, gradually replacing the air cooling. Liquid cooling has a better cooling effect, it is not easy to have heat dissipation dead ends, and it can also save the space for installing a fan in the case and the electricity cost of turning on the fan.
Liquid cooling is the ability of ultra-micro computers, some analysts of securities companies believe that the performance of ultra-micro computers has soared, and many customers are attracted by liquid cooling - after all, server Dell, HP, IBM can also do - customers do not want to be in the critical stage of large language model competition, hardware forks.
Liang and Huang have a deep relationship, and the two started their own businesses in 1993, and the two companies are only 10 miles apart. The motherboard of the supermicro computer has been equipped with Nvidia's GPU for a long time, and no matter what Nvidia does, the supermicro computer will follow suit. Later, Nvidia made AI GPUs, and no one was optimistic, so Liang helped to help produce servers that could combine NVIDIA GPUs for AI training. Huang has appeared at Supermicro's events on several occasions and acted as a "salesman" for Supermicro's server solutions.
Liang Jianhou has three younger brothers, all of whom have founded businesses in Taiwan and worked as suppliers for supermicro computers. The eldest brother Liang Jianfa's Daxun Technology mainly makes chassis and heat dissipation systems, the second brother Liang Jianda's Kenwei Technology makes power supplies, and the younger brother Liang Jianguo's Haoran Technology proofs Daxun's chassis.
Liang saw that he was very strict with his younger brothers. According to local media reports, in the early days of the business, the chassis of Daxun Technology had just been designed, and Liang Jianhou asked Liang Jianfa to fly to the United States immediately with the chassis, and at most flew three times a month. Liang Jianfa went to pick up a cup of coffee before the meeting, and was 30 seconds late when he entered the conference room, and was scolded by Liang Jianhou in front of everyone, and he had to be punished for standing. Once, when he wanted to change the product design, Liang Jianhou ignored Liang Jianfa's business trip in Shanghai and asked him to fly back the next day to discuss the plan.
It is the demanding requirements for products that allow Supermicro Computer to survive the competition with giants such as Dell, HP, and IBM, and lay out ahead of time to catch up with this round of generative AI opportunities.
However, the earnings report on April 30 is worth paying attention to, looking at the growth rate of supermicrocomputers, which can partly reflect the momentum of this wave of generative AI.
This article does not constitute any investment advice. The cover image is from the WeChat gallery. This article refers to reports such as Gelonghui and Business Today, and acknowledges them together.