This AI stock was left for dead. Now traders are betting big on a comeback

Traders are increasingly optimistic about Super Micro Computer, a player in the data-center server market, as it shows signs of recovery following a challenging year. The company's stock surged by 15% on Wednesday after its earnings report, although it remains down 49% from its peak last year. The options market reflects this newfound confidence, with traders favoring bullish positions. On Wednesday, nearly five times as many call options were traded compared to puts, making up around 90% of the total options value. Notably, some of the largest transactions involved call buyers, with one trader investing $1.4 million on 2,000 options at a strike price of 35, set to expire on January 15 of next year. The most actively traded contract was also the 35-strike option, expiring on May 8, which saw 22,000 transactions. This is significant, as Super Micro has not exceeded this level since December. Since March, the company's shares have rebounded by nearly 50%, recovering from a dramatic 30% drop linked to legal issues involving its cofounder and others, who were charged with smuggling Nvidia chips to China. Importantly, Super Micro itself was not named as a defendant in the case. The positive earnings report, despite revenue falling short of expectations, has sparked renewed interest and optimism for the company's future.