Supermicro Inks $20 Billion Deal with Saudi's DataVolt for AI Infrastructure

Supermicro (SMCI) Can Feasibly Earn $4 Billion In Annual Revenue And $200 Million In Annual EBIT From Its "Party In The Desert" Deal With The Saudi Hyperscaler DataVolt

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Supermicro (SMCI), a leading GPU-as-a-Service player and a prominent retailer of liquid-cooled AI racks, has managed to clinch one of the larger deals inked during President Trump's investment-focused trip to Saudi Arabia. To wit, Supermicro has now inked a "multi-year partnership agreement" with DataVolt, a leading Saudi data center company that plans to "pair gigawatt-class renewable and net-zero green hydrogen power with the industry's most advanced server technology." While the granular details of this $20 billion agreement have not been made public, the deal will see Supermicro supply high-density GPU platforms and rack-scale liquid cooling systems to DataVolt over a number of years. As per the numbers crunched by Goldman Sachs, the deal could feasibly entail $5 billion in annual revenue and an annual EBIT of around $200 million: "Assuming a 5-year deal, 5% margins, and the entirety of the $20B represents IT hardware revenue, this would represent $4 bn of annual revenue and $200 mn of annual EBIT." Despite the sizable windfall that Supermicro stands to gain from its just-inked agreement with DataVolt, Goldman Sachs has chosen to reiterate its 'Sell' rating for the stock, replete with a $24 share price target. For reference, SMCI shares are currently trading at the $46.86 price level in pre-market trading. On the flip side, Raymond James analyst Simon Leopold has adopted a much more bullish view of Supermicro in light of its "Party in the desert" deal with DataVolt, reiterating an 'Outperform' rating and a $41 stock price target. Leopold believes that the deal "expands visibility with multi-year hardware backlog and supports upward estimate revisions." However, the analyst remains concerned about the "uncertain" build-out timing, currently pegged for 2028. As we noted recently, Supermicro reported $4.6 billion in revenue for its fiscal Q3 2025, matching its recently issued guidance but failing to outpace the consensus expectation of Wall Street analysts, pegged at $5.05 billion. It was SMCI's guidance, however, that was generally found anemic. After all, the company now expects to report its fiscal Q4'25 revenue in the range of $5.6 billion to $6.4 billion vs. the $6.81 billion consensus estimate. It also expects to earn FY 2025 revenue of between $21.8 billion and $22.6 billion, constituting a substantial discount to the $23.5 billion consensus estimate. According to Rosenblatt, Supermicro faces revenue realization delays, to the tune of ~$1 billion and precipitated by the ongoing customer evaluations of the next-generation NVIDIA Blackwell GPU platforms. Rosenblatt analyst Kevin Cassidy thinks this revenue from the March-ending quarter will now materialize in the June and September quarters.

Supermicro (SMCI) Is On A Hiring Binge In Saudi Arabia After Inking A Massive $20 Billion Deal

This is not investment advice. The author has no position in any of the stocks mentioned. Wccftech.com has a disclosure and ethics policy. Supermicro (SMCI), a prominent player in the GPU-as-a-Service sphere and a leading retailer of liquid-cooled AI racks, has been hiring aggressively in Saudi Arabia, and that too before the announcement of a game-changer deal on Tuesday with the Kingdom's biggest AI player. As we noted in a dedicated post earlier today, Supermicro has now inked a "multi-year partnership agreement" with DataVolt, a leading Saudi data center company. While the granular details of this agreement have not been made public, the deal is worth as much as $20 billion, and will see Supermicro supply high-density GPU platforms and rack-scale liquid cooling systems to DataVolt over a number of years. According to Goldman Sachs, the deal could feasibly entail $5 billion in annual revenue and an annual EBIT of around $200 million for Supermicro, based on an assumed contract period of 5 years and a built-in margin of around 5 percent. This brings us to the crux of the matter. As per our own Google search, it appears that Supermicro has been seeking job candidates in Saudi Arabia for at least the past 4 weeks or so. The roles appear eclectic as well, ranging from Senior Service Engineer to Senior Sales Manager. Interestingly, and as mentioned earlier, Supermicro has been hiring in Saudi Arabia even before a formal announcement of its deal with DataVolt, indicating the high level of confidence that the world's leading retailer of liquid-cooled AI racks reserves for its newfound Saudi partners. In another bit of interesting development, Supermicro has just announced the DLC-2, its next-generation liquid-cooling technology that aims to deliver up to 40 percent savings in water and energy consumption for a given data center. The technology claims to reduce a data center's Total Cost of Ownership (TCO) by up to 20 percent. Supermicro is able to achieve these savings by increasing the cold plate coverage of server components, allowing for a reduced number of fans operating at lower speeds. Additionally, Supermicro's DLC-2 liquid-cooling technology is reportedly able to capture 98 percent of the heat emitted by a given server rack, which allows for higher inlet liquid temperature (up to 45 degrees Celsius). The company notes: "The higher inlet temperature eliminates the need for chilled water, chiller compressor equipment cost, and additional power usage, saving up to 40% of data center water consumption." This is, of course, a critical advantage for data centers operating in the desert climate of Saudi Arabia, characterized by high day-time temperatures and sparse water resources.

Why Super Micro Computer Stock Soared Again Today | The Motley Fool

One day after the stock jumped after Wall Street analysts said it was one of the best ways to get exposure to AI, Supermicro, as the company is often known, was gaining again on a new deal with DataVolt, a Saudi Arabian data center company. The agreement was one of several announced between U.S. semiconductor companies and Saudi Arabian entities this morning. As of 1:08 p.m. ET, the stock was up 17% on the news. This morning, DataVolt said it was signing a multiyear partnership agreement with Supermicro to deploy server solutions and rack systems for AI cloud computing in Saudi Arabia and the U.S. The deal is valued at $20 billion and comes at a time when Supermicro is still reeling from a delay in financial reporting that sent the stock tumbling. Investors now seem to be regaining confidence in the business, lifting the AI stock. It's important to consider that $20 billion, even over several years, is a large price tag for Supermicro, as its market cap is only $27 billion. The company also announced several improvements to its direct liquid cooling (DLC) platform, showing that its technology continues to advance, as it's regarded as a leader in AI storage and server solutions. Supermicro has struggled to maintain its gross margins in recent quarters, but advancing technology and a big new contract could help reverse that trend. Investors should keep an eye on that figure going forward. If the company can drive gross margin higher, the stock is likely to follow.

SMCI stock jumps on DataVolt deal By Investing.com

Investing.com -- Super Micro Computer Inc. (SMCI) shares jumped 7.9% in premarket trading on Wednesday after the company announced a multi-year, $20 billion partnership with Saudi data center firm DataVolt. The agreement will see Supermicro deliver high-density GPU platforms and rack-scale liquid cooling systems to power DataVolt's hyperscale AI campuses in Saudi Arabia and the United States. The deal is aimed at accelerating the adoption of sustainable, large-scale computing infrastructure. "We are thrilled to partner with Supermicro and build on the strong foundations laid in these first 100 days of the Trump Administration," said DataVolt CEO Rajit Nanda. He cited support from President Trump and Saudi Crown Prince Mohammed bin Salman as key to enabling the business environment. "Partnering with Supermicro guarantees us a U.S.-made supply chain for critical GPU systems and positions DataVolt to accelerate our investment plans," added Nanda. Supermicro President and CEO Charles Liang said the company would continue to expand its U.S. manufacturing operations as part of the agreement. "By working together, we will bring cutting-edge AI and compute infrastructure, enabling the Kingdom's vision of becoming a global hub for technology and innovation," he said. The companies described the agreement as a strategic alignment combining renewable energy, advanced server technologies, and international cooperation. DataVolt plans to power its campuses using gigawatt-scale renewable energy and net-zero green hydrogen.