Super Micro Computer Stock Surges on Elon Musk Deal

The company will provided servers for xAI

Deputy Editor
Jun 20, 2024 at 10:53 AM
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Super Micro Computer Inc (NASDAQ:SMCI) stock is surging, up 7.6% to trade at $989.94 at last glance, after news that the company will provide servers for Elon Musk's startup xAI. Dell Technologies (DELL) is also rising, after CEO Michael Dell posted on X that "we're building a Dell AI factory with Nvidia to power Grok for xAI." 

On track for its fifth daily win in the last six days, SMCI is up 245% since the start of 2024, and 345% since last June. Just last week, the shares bounced off support at the 120-day moving average, which provided a floor for a consolidation at the start of the month. Now, the equity is above all notable trendlines. 

Options traders were quick to the draw this morning. So far, 130,000 calls and 70,000 puts have crossed the tape, which is triple the volume typically seen at this point. The June 1,000 call is the most active contract, where new positions are being opened. 

Short interest has been building, up 31.5% in the last month. Now, the 4.06 million shares sold short account for 8.1% of the stock's available float. 

 

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