MARKETS

Super Micro Computer, one of the hottest AI plays alongside Nvidia, tumbles on share offering

PUBLISHED TUE, MAR 19 20248:45 AM EDTUPDATED TUE, MAR 19 20244:10 PM EDT

Jesse Pound@/IN/JESSE-POUND@JESSERPOUND

SHAREShare Article via FacebookShare Article via TwitterShare Article via LinkedInShare Article via Email

KEY POINTS

  • Super Micro Computer, a tech infrastructure company, has become one of the biggest winners of Wall Street’s appetite for AI investments.
  • The company said in a filing Tuesday morning that it plans to sell two million additional shares of common stock, pushing its total shares outstanding to more than 58 million.
  • Goldman Sachs is the underwriter for the new share offering.
  • Goldman also has an option to purchase up to 300,000 additional shares of Super Micro Computer within the next 30 days.

In this article

Follow your favorite stocksCREATE FREE ACCOUNT

Shares of Super Micro Computer dropped Tuesday after the company announced a new share offering, taking a bite out of one of the biggest rallies tied to the artificial intelligence boom.

The company said in a filing Tuesday morning that it plans to sell two million additional shares of common stock, pushing its total shares outstanding to more than 58 million.

The shares sank 9% on the day.

Super Micro Computer Inc

RT Quote | Last NASDAQ LS, VOL From CTA | USD

After Hours: Last | 03/22/24 EDT

966.00-6.74 (-0.69%)

972.74+1.13 (+0.12%)

Close

WATCHLIST+

QUOTE DETAILS

Super Micro, 1-day

“The principal purposes of this offering are to obtain additional capital to support our operations, including for the purchase of inventory and other working capital purposes, manufacturing capacity expansions and increased research and development (‘R&D’) investments,” the filing said.

Goldman Sachs is the underwriter for the new share offering. Goldman also has an option to purchase up to 300,000 additional shares of Super Micro Computer within the next 30 days.

Super Micro Computer, a tech infrastructure company, has become one of the biggest winners of Wall Street’s appetite for AI investments. Its stock has surged more than 900% over the past year prior to Tuesday’s decline, outpacing even Nvidia.

Super Micro Computer Inc

RT Quote | Last NASDAQ LS, VOL From CTA | USD

After Hours: Last | 03/22/24 EDT

966.00-6.74 (-0.69%)

972.74+1.13 (+0.12%)

Close

WATCHLIST+

QUOTE DETAILS

Super Micro Computer, YTD

The recent advancements in AI, including large language models such as ChatGPT, require increased computing power and data storage. That has led investors to focus on chipmakers such as Nvidia and server infrastructure companies such as Super Micro Computer as the first wave of beneficiaries.

Super Micro Computer is a fast-growing company, but still relatively small compared to the tech giants that have also seen a stock rally fueled by the interest in AI. The company reported $3.66 billion in net sales for the fourth quarter, up more than 100% year over year. It generated net income of nearly $300 million. The stock was added to the S&P 500 earlier this month.

Notably, Super Micro Computer has seen some of its insiders sell their own shares of the company in recent months. CEO Charles Liang sold about 1,000 shares in January that were attributed to his spouse. Director Daniel Fairfax has sold 900 shares across three different days so far this year.

The sales of both Liang and Fairfax were part of formal stock sale plans, according to VerityData and the filings. But other transactions, including a sale of 5,000 shares from Director Sherman Tuan, did not appear to be part of such plans.

Director Shiu Leung Chan did buy 2,000 shares on Feb. 1, though he resigned as director on March 11. Super Micro Computer said the resignation was to focus on family-owned business projects and did not have to do with any disagreements with the company.

Don’t miss these stories from CNBC PRO:

TRENDING NOW

DWAC stock shares close nearly 14% down after Trump social media merger approved by shareholders

Trump says ‘I love Truth Social’ one day after DWAC stock plunges on social media merger vote

As Republicans propose to raise the Social Security retirement age, here’s how benefits may change

Mega Millions jackpot is nearly $1 billion—these 8 states don’t tax your winnings

Venting won’t help, new study shows—this is the No. 1 way to manage your anger

by Taboola

Sponsored Links

FROM THE WEB

Wall St. Legend Warns: “13 AI Stocks To Avoid”Visionary Profit

Learn More

5 cose che devi sapere sull’halving del BitcoineToro

https://www.cnbc.com/2024/03/19/super-micro-computer-one-of-the-hottest-ai-plays-alongside-nvidia-tanks-10percent-on-share-offering.html