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Super Micro (SMCI) Surges 6.4%: Is This an Indication of Further Gains?

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Super Micro Computer (SMCI - Free Report) shares ended the last trading session 6.4% higher at $83.31. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 6.7% loss over the past four weeks.

Super Micro is set to join the S&P MidCap 400 effective prior to the trading hours on Dec 22, 2022. It has a VGM Score of A. The company is making rapid strides with its transition into a Total IT Solutions provider with environmentally-friendly and energy-saving server, AI, storage, IoT, and switch systems, software, and services while delivering advanced high-volume motherboard, power, and chassis products.

This server technology company is expected to post quarterly earnings of $2.76 per share in its upcoming report, which represents a year-over-year change of +213.6%. Revenues are expected to be $1.75 billion, up 49.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Super Micro, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on SMCI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Super Micro belongs to the Zacks Computer- Storage Devices industry. Another stock from the same industry, Western Digital (WDC - Free Report) , closed the last trading session 1.7% higher at $32.08. Over the past month, WDC has returned -12.2%.

Western Digital's consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.08. Compared to the company's year-ago EPS, this represents a change of -103.5%. Western Digital currently boasts a Zacks Rank of #4 (Sell).

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