Supermicro Is Struggling to Handle AI Demand, But Here’s Why the Bears Might Be Wrong on This One

Supermicro (SMCI) recently announced plans to raise $7 billion through an equity offering to purchase components needed to fulfill AI server orders worth $39 billion. Where otherwise a backlog would be considered positive for a company, raising money through equity issuance to fulfill that order has spooked investors. Accordingly, concerns about dilution have caused SMCI stock to fall 28% over the past five days.

This isn’t the company’s first experience with severe volatility. In 2024, after Supermicro was nearly delisted from the Nasdaq Exchange due to its auditor resigning over accounting irregularities, the stock dropped by 70%. Since then, sudden and large moves have become common with SMCI shares.