Super Micro to raise $7 billion in equity offerings for AI orders

Super Micro Computer Inc. said Tuesday it plans to raise $7 billion through a series of equity and equity-linked offerings, using the proceeds to buy components for about $39 billion in AI server orders the company has received from more than 20 customers in recent weeks.

"The scale of this raise reflects the unprecedented demand we're seeing for our AI infrastructure solutions," said Charles Liang, chief executive officer at Super Micro, in a statement. "These funds will allow us to secure the components needed to fulfill our growing backlog."

The San Jose, California-based company will offer $5 billion in concurrent underwritten public offerings — about $1.25 billion of common stock and $3.75 billion of depositary shares representing mandatory convertible preferred stock — plus up to $2 billion in an at-the-market program expected to begin in the third quarter of 2026. J.P. Morgan, Goldman Sachs & Co. LLC and Citigroup are acting as lead joint bookrunning managers.

The capital raise shows the intensity of the AI infrastructure buildout, where companies like Super Micro must commit billions to secure scarce components — including Nvidia's graphics processing units — before recognizing revenue on customer orders. The $39 billion in orders the company cited do not constitute firm commitments and remain subject to cancellation, the company said in a regulatory filing. Super Micro's stock fell sharply Tuesday as investors weighed the dilutive impact of the offering against the record backlog.

Deal Structure and Terms

Each depositary share in the offering will represent a 1/20th interest in newly issued series A mandatory convertible preferred stock with a $1,000 liquidation preference per share. The preferred shares will automatically convert into common stock on or about June 1, 2029, unless converted earlier. The company plans to list the depositary shares on the Nasdaq Global Select Market under the ticker "SMCIP."

ICR Capital LLC is serving as Super Micro's financial advisor for the depositary shares offering. The company may also use a portion of the net proceeds for general corporate purposes, including debt repayment, working capital and capital expenditures.

Dilution and Market Reaction

The $7 billion equity raise represents a significant dilution for existing shareholders of Super Micro, which had a market capitalization of roughly $36 billion before the announcement. The company's stock has been volatile this year as investors balance the AI-driven revenue opportunity against the capital requirements of scaling production.

The ATM program, which could add another $2 billion in common stock sales starting in the third quarter, gives Super Micro additional flexibility but also introduces further potential dilution. The company said the timing and size of ATM sales will depend on market conditions.

This article is for informational purposes only and does not constitute investment advice.