Super Micro Has $39 Billion in AI Server Orders, Yet Shares Fell on the News. Time to Buy the Stock?
The AI server maker's record orders came with a $7 billion bill for shareholders.
Super Micro Has $39 Billion in AI Server Orders, Yet Shares Fell on the News. Time to Buy the Stock?
Overview
Server maker Super Micro Computer (NASDAQ: SMCI) shared the kind of update on Tuesday evening that growth investors usually celebrate. The company said it has received approximately $39 billion in orders for its advanced artificial intelligence (AI) servers from more than 20 customers in recent weeks. That's more than its total revenue over the past four quarters combined.
But the news came with a catch. To buy the components needed to build those servers, Super Micro plans to raise $7 billion by selling a combination of common stock and convertible preferred shares. Investors focused on the bill rather than the orders, sending shares down about 28% on Wednesday. In total, shares are now down about 37% over the last five trading days alone.
Details
It's quite the reversal. The stock jumped 68% in May, and it has now given back a big piece of that gain in a single trading session. And the size of the financing helps explain the reaction: $7 billion equals more than a third of the company's entire market value of about $20 billion as of this writing.
Source
Originally published at www.fool.com.
