UK's Softcat lifts profit forecast, but flags memory chip shortage uncertainty

* Softcat raises profit forecast due to AI ​demand ⁠and early orders

* Chip shortage creates uncertainty for ​second half

* Shares rise nearly 10% in early trading (Adds shares, details on AI demand, chip ​shortage, ‌analyst comment throughout)

March 18 (Reuters) - British IT firm Softcat raised its annual ⁠profit forecast on Wednesday after strong demand for artificial ⁠intelligence infrastructure and early orders ​driven by memory chip shortages boosted first-half results.

Shares in the IT services and infrastructure provider jumped nearly 10% in early trading.

However, it warned that chip supply constraints ​created uncertainty ‌for the second half.

Softcat has been benefiting from rising corporate spending on AI and automation, helping it maintain growth beyond recurring and one-off projects even as concerns over AI disruption triggered a selloff in software stocks in February.

AI ​adoption has also fuelled demand for memory chips that continues to outstrip supply, ‌creating a shortage some expect to last until 2030.

"The market is still only in the early stages of ‌the AI adoption cycle, creating significant long-term opportunities for Softcat," CEO Graham Charlton said.

The company now expects high-single-digit growth in underlying operating profit for the year to ​July, up from a previous forecast of low-single-digit growth, though it cautioned that second-half comparisons will ‌be tougher due to larger projects delivered in the same period last year.

STRONG SET OF RESULTS

JPMorgan analysts described the update as a "strong set of underlying results" ⁠but warned ⁠against assuming similar outperformance next year, noting that part ‌of the improved outlook reflects potentially one-time items.

For the first half, Softcat reported an underlying ​operating profit of 93.8 ​million pounds ($125.4 million), up 27.3% from a year earlier.

The ‌company has also been investing in data and digital projects, including acquisitions to expand its automation and AI infrastructure footprint.

Softcat