TLDR
- SMCI fell nearly 28% Wednesday after announcing a financing package that could raise up to $7 billion
- The company is selling 45.45 million common shares at $27.50 and 75 million depositary shares at $50 each
- Proceeds will fund components for roughly $39 billion in AI server orders from over 20 customers
- Wolfe Research initiated coverage at Peer Perform, citing legal risks following the indictment of co-founder Wally Liaw
- SMCI was up 1.37% in Thursday premarket at $29.67; Wall Street holds a consensus Hold rating with an average target of $32.70
Super Micro Computer dropped nearly 28% on Wednesday after unveiling a financing plan that could raise up to $7 billion. The stock edged back up 1.37% in Thursday’s premarket to $29.67, but the damage from the prior session was hard to ignore.
Super Micro Computer, Inc., SMCI
The financing package includes two concurrent offerings. The company is selling 45.45 million common shares at $27.50 each and 75 million depositary shares at $50 each, the latter tied to newly issued 7.0% mandatory convertible preferred stock.
Net proceeds are expected to be around $1.22 billion from the common stock offering and $3.68 billion from the preferred stock-linked deal. An existing $1.25 billion at-the-market program brings the total potential raise to roughly $7 billion.
Super Micro said the funds will go toward purchasing components to fulfill approximately $39 billion in AI server orders received from more than 20 customers. The rest will cover debt repayment, working capital, and capital expenditures.
The announcement rattled investors who were already on edge. The Defiance Daily Target 2X Short SMCI ETF surged about 40% Wednesday as bearish traders cashed in on the decline.
Wolfe Research Initiates With Caution
On Thursday, Wolfe Research kicked off coverage of SMCI with a Peer Perform rating, pointing to legal and regulatory risks following the indictment of co-founder Wally Liaw. The firm puts fair value between $26 and $31 per share, or 9 to 11 times 2028 earnings per share.
Wolfe models 2028 revenue of $68.2 billion and EPS of $2.90. The analyst flagged potential risks including the resignation of auditor BDO USA or further leadership changes. No other executives have been named in the indictment, and Super Micro says its NVIDIA relationship remains intact.
Demand looks solid on the surface — the firm noted the backlog is at record highs. But Wolfe said the risk profile is too uncertain to get more constructive on valuation right now.
InvestingPro’s analysis puts the stock’s fair value at $40.03, suggesting the current price may be cheap. The stock has fallen 37.6% over the past week.
Technical Picture Stays Weak
SMCI is trading below all major moving averages. It sits 23.4% below its 20-day, 7.6% below the 50-day, 5% below the 100-day, and 18% below the 200-day moving average. The stock is down 32.3% over the past year.
A death cross formed in December 2025, and it’s still in play. The MACD sits below its signal line, with a negative histogram — not a great setup for bulls.
Technical traders are watching resistance near $30 and support around $29.50.
Mizuho holds a Neutral rating and raised its price target to $44 on June 1. Wall Street’s consensus sits at Hold with an average target of $32.70.
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