Super Micro Computer alarmed investors Tuesday morning by announcing a new share offering, sending its stock hurtling down just a day after it debuted on the S&P 500.
The 31-year-old server and computer infrastructure company plans to sell an additional 2 million shares of common stock, according to a regulatory filing. It currently has 56.5 million shares outstanding.
In early-morning trading Tuesday, Super Micro stock fell over 12%, adding to a 6% decline in Monday’s trading. The San Jose, California-based company’s stock peaked at $1,198 per share on March 13 before dropping to $876 per share Tuesday. Shares have increased 790% over the past year, fueled by Wall Street’s interest in artificial intelligence.
“The principal purposes of this offering are to obtain additional capital to support our operations, including for the purchase of inventory and other working capital purposes, manufacturing capacity expansions, and increased research and development (‘R&D’) investments,” the company said in its filing.
Super Micro is one of several beneficiaries of the latest surge of interest in AI and has become a frequent supplier for a variety of companies and governments. Its servers — equipped with chips from its frequent collaborator Nvidia — are expected to double the company’s revenue this year.
The company’s strategy of creating “building blocks” that can be assembled into servers in a variety of configurations has given it an immense advantage over its rivals, who have a more limited set of offerings. That flexibility has given Super Micro an advantage in the AI boom, allowing it to cater to firms working on everything from self-driving car technology to the so-called large language models (LLM) that drive AI chatbots like OpenAI’s ChatGPT.
On Monday, Super Micro announced three new Nvidia-based “ready-to-deploy” generative AI SuperClusters. These clusters aim to reduce energy consumption and lower the cost of ownership for data centers by efficiently cooling servers.
The company also announced new systems for generative AI featuring Nvidia’s new Blackwell next-generation graphics processing units. The press release announcing the chips has been noted for hosting a “Who’s Who” of tech CEOs, from Microsoft CEO Satya Nadella and Tesla CEO Elon Musk to Google CEO Sundar Pichai and Amazon’s Andy Jassy.