AI server major Super Micro Computer (Super Micro Computer) announced Monday that it has surpassed 100,000 graphics processors (GPUs) for AI shipments per quarter and launched a new liquid-cooled product line.

Upon the news, Super Micro Computer shares rose 15.79% on the day to close at $47.74, its biggest one-day gain since May. The rally brought a measure of rebound to the weeks-long slump in its stock price. The market is widely believed to be the result of growing demand for generative AI technology, which is driving increased demand for server hardware.

Liquid-cooling technology key to server market

Known for its innovative liquid-cooling technology, Ultra Micro Computer has introduced even more competitive liquid-cooling solutions that offer significant power and space savings. The new products include Coolant Distribution Units (CDUs) and cooling towers, and these liquid-cooled solutions can save up to 40% of infrastructure energy consumption and provide 80% space savings compared to traditional air-cooled technologies.

This is a critical technological innovation for those large-scale AI computing centers, helping to address the large amount of power required for AI computing. As AI technology continues to evolve and expand, this technology is likely to become standard in many large data centers in the coming years.

Generative AI drives hardware market as AI demand soars

The boom in generative AI technology is directly driving demand in the server market, especially from companies like Ultra Micro Computer that are able to provide high-performance AI hardware. Not only do Ultra Micro's servers utilize AI chips from leading vendors, including NVIDIA, but its technological advantage allows it to quickly acquire the industry's most sought-after AI chips.

If the price per GPU system is similar to NVIDIA's $30,000 chips, the total value of Ultra Micro Computer's GPU orders per quarter could be in the billions of dollars, according to the analysis, showing the company's strong performance in the AI hardware market.

Ultra Micro Computer said its liquid-cooling technology has been deployed in the world's largest AI factory, further solidifying its leadership position in the market.

Share price expected to recover further

Ultra Micro Computer shares have experienced significant volatility in the recent past, notably falling more than 9% over the past two weeks, largely driven by a short-selling report from Hindenburg Research and the U.S. Department of Justice launching an investigation into Ultra Micro Computer. According to market research firm Ortex, Super Micro Computer's short position accounts for more than 20 percent of its outstanding shares, or about $3.59 billion.

However, as the stock price recovers, short sellers may face short-term losses and some short sellers may choose to close their positions, which could further push up the stock price.

Competitive Advantage Outstanding, Future Prospects Remain Challenging

Ultra Micro Computer's innovative liquid-cooling technology and the high market demand for its products give it a significant competitive advantage in the AI server market. The newly launched liquid-cooled solutions can achieve ultra-high densities of up to 96 NVIDIA Blackwell B200 chips per rack, which is an unparalleled technological breakthrough for companies looking to maximize computing power in limited space. In addition, the energy and space-saving capabilities of these solutions are especially attractive to organizations that need to deploy AI computing power at scale.

Gadjo Sevilla, senior AI technology analyst at eMarketer, noted that these technological innovations will help UltraMicro PCs fight for more market share in an expanding market, especially as competitive pressure is set to intensify with the upcoming availability of NVIDIA's latest Blackwell GPUs later this year.