Super Micro Computer shares plunge 15% on plans to raise $7 billion in equity offerings

Shares of Super Micro Computer, a developer of modular server and storage solutions, plunged 15% on Wednesday, 10 June, hitting an intraday low of $36.50, as investors reacted negatively to the company’s plans to raise $7 billion.

The company said late Tuesday that it plans to raise $7 billion through a series of equity and equity-linked financing packages to help satisfy surging demand for its servers and storage systems.

It is planning to offer $5 billion in new common and preferred shares and raise an additional $2 billion through an at-the-market (ATM) offering in July or later. ATM offerings allow companies to gradually sell new shares into the market instead of issuing them in one large block, according to a report by Barron's.

The AI boom has significantly increased demand for servers, but it has also left Super Micro short of cash as the company struggles to keep pace with the spike in orders. The company said it plans to use the proceeds to fulfil approximately $39 billion worth of orders for advanced AI servers from more than 20 customers.

It added that a portion of the net proceeds may also be used for other purposes, including debt repayment, additions to working capital, and capital expenditure requirements.

AI infrastructure firms have witnessed accelerated demand as technology companies and cloud providers ramp up investments in data centres to support large language models and other AI applications. Last week, Alphabet moved to raise $84.75 billion through upsized equity offerings.

Super Micro, too, emerged as one of the biggest beneficiaries of the boom in AI server demand, with revenue in the March quarter more than doubling compared with a year earlier. However, the business remains highly capital-intensive, and the company generated $6.8 billion in negative free cash flow over the 12 months ended March 2026, according to MarketWatch.

The company has also been facing pressure on margins as costs for key components continue to rise. Chief Executive Officer Charles Liang told analysts in May that memory costs had more than tripled in recent months.

Shares recover from lows but remain far below record highs

Super Micro also continues to face legal and reputational challenges. In March, US prosecutors charged company co-founder Yih-Shyan Liaw and two others with conspiring to smuggle $2.5 billion worth of Nvidia-powered servers to China in violation of export controls. The development triggered a 30% decline in the stock during the same month.

Although the stock has since staged a strong recovery, it still trades sharply below its record highs. Shares of the Nasdaq-listed company witnessed sustained pressure between November 2025 and March 2026, during which they lost 56%.

From its all-time high, the stock is still trading nearly 60% lower. It had touched a record peak of $122.90 apiece in March 2024. Between February 2023 and March 2024, the stock witnessed a near one-way rally, delivering an extraordinary return of nearly 1,300%.

(With inputs from Reuters and other agencies)

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