Super Micro Computer announced that its gross margins for the fourth quarter are projected to be approximately double previous forecasts, causing its stock to surge in after-hours trading.

The server company now anticipates gross margins in the range of 15% to 17%. This is a significant upward revision from its earlier guidance of up to 8.2% to 8.4%. Super Micro attributed this improvement primarily to a favorable customer and product mix.

Following the announcement, the company's stock experienced a 17% increase, reaching $29.92 after the market close on Tuesday. During regular trading hours, shares had closed up 7% at $25.50, though they remain down 13% for the year. Revenue is expected to be at the lower end of the company's guidance, between $11 billion and $12.5 billion, aligning with analyst expectations of $11.73 billion.