The big picture: Falling consumer demand marked 2022 as the year the pandemic tech boom ceased, and many fear a recession could worsen things in 2023. One tech company defied the trend, outperforming all other billion-dollar US tech companies. However, analysts are skeptical that it can meet its projected goals for this year.
Shares of server maker Supermicro rose 89 percent last year, more than any other US tech company worth over $1 billion. The growth contrasts starkly with other tech giants hit hard in 2022 by oversupply and low demand.
During 2022, Supermicro's market cap increased by $2 billion, from $2.4 billion to $4.4 billion. At the end of its fiscal year 2022 in June, the company reported $5.2 billion in revenue – a 46 percent year-over-year gain.
Supermicro posted 80 percent year-over-year growth for the following quarter ending September. It saw YoY growth in all territories that quarter, but its primary market in the US stood out, expanding by 131 percent. Earnings per share rose from $2.09 in 2021 to $5.32 in 2022.
Meanwhile, 2022 was the Nasdaq's worst performance since the 2008 financial crisis. Companies like Amazon, Meta, and Tesla lost half their value.
After remote working amid lockdowns started a boom in PC and electronics sales in 2020 and 2021, 2022 saw shipments crash for those devices as well as smartphones and tablets. Albeit more related to mining, graphics cards experienced their lowest shipment numbers since 2005.
Semiconductor giant TSMC, which supplies the chips for many other tech companies' products, initially defied the gloomy climate but ultimately is feeling the sting when Nvidia, AMD, and others slashed orders.
Giving clients greater leeway in customizing its servers made Supermicro's products more profitable than off-the-shelf servers, helping it escape last year's trends according to CNBC. Much of the company's growth also came from data centers. For the 2024 fiscal year, Supermicro hopes expansion into AI will help it reach sales around $8 to $10 billion, but analysts are cautious.
TSMC weathered economic headwinds through most of 2022, but its current troubles are expected to result in a couple of negative quarters in the first half of 2023 before it makes a recovery later in the year. By a similar token, Supermicro might not escape the effects of an expected slowdown in global server market growth this year. However, investments in AI might make a difference.