Super Micro Computer Surges After Equity Offering

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Launches Public Offering of 2 million Shares
S&P 500 inclusion and a partnership with Nvidia propel SMCI’s revenue growth

Super Micro Computer (SMCI) is one of the top global suppliers of advanced server and storage solutions tailored to data centers.

Riding the wave of the artificial intelligence surge, the company’s stock value has surged by +265%^[1] this year.

Capitalizing on this upward trend, it is cashing in with a public stock offering of its shares.

Source: Yahoo Finance

SMCI has surpassed Nvidia, the driving force behind this year’s AI-driven surge on Wall Street, due to the skyrocketing demand for its servers utilized in artificial intelligence data centers.

Last Tuesday, Super Micro Computer announced its intention to offer 2 million shares, potentially generating approximately $1.75 billion in gross proceeds, with each share priced at $875.

The company indicated in a regulatory submission to the U.S. Securities and Exchange Commission that the funds raised from the stock sale will be allocated towards acquiring inventory, enhancing manufacturing capabilities, boosting investments in research and development, and other operational capital needs.

Shares of the San Jose-based company have more than tripled in value since January, prior to the offering.

A year ago, Supermicro’s shares were trading under $100.

Nevertheless, fueled by the surge in demand for AI, their value soared, reaching a peak of $1,229^[2] on March 8.

The company’s valuation significantly increased following its recent addition to the S&P 500 index.

S&P announced Super Micro’s inclusion in the large-cap index on March 1, with the change taking effect on the following Monday.

Supermicro’s revenue is expected to double this year, driven by the sales of its servers equipped with Nvidia AI chips.

The company maintains a strong partnership with Nvidia Corp. (NVDA), and recently, it has recorded remarkable sales growth, positioning itself as one of the leading financial beneficiaries of the artificial intelligence boom.

The company noted that following the offering, the total number of outstanding shares will rise to 58.6 million. Moreover, Goldman Sachs, acting as the underwriter, has the option to purchase up to an additional 300,000 shares within a 30-day period.

Investors can long Super Micro Computer (SMCI) using our 2x Super Micro Computer.

Footnotes:

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Yahoo Finance

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Authored by

Boyan Girginov

26 Mar 2024