Super Micro Computer, Inc. (SMCI.US) raises $7 billion in stock issuance to prepare $39 billion in orders, Silicon Valley's equity financing frenzy continues.

Artificial intelligence (AI) server manufacturer Super Micro Computer, Inc. (SMCI.US) announced plans to raise up to $7 billion through a package of equity offerings to purchase components and equipment needed to fulfill customer orders. This move comes at a time when tech giants led by Alphabet Inc. Class C parent company Alphabet (GOOGL.US) are unleashing an epic wave of equity financing, reflecting the frenzy of investment in AI infrastructure that is reshaping the global capital markets. $7 billion: Preparing for $39 billion in orders According to the announcement released by Super Micro Computer, Inc., the transaction will include a $5 billion underwritten public offering and a $2 billion "at-the-market" (ATM) program. Of the underwritten offering, $1.25 billion will be from common stock sales, while the remaining $3.75 billion will be through mandatory convertible preferred stock depositary shares. The underwriters leading the offering are JPMorgan, Goldman Sachs Group, Inc., and Citigroup. The pricing for the public offering will be determined on Wednesday evening in New York time. The stock sales activities for the ATM portion will gradually begin in the third quarter of this year. Currently, there is a significant demand for AI servers powered by NVIDIA Corporation (NVDA.US) chips, and Super Micro Computer, Inc. has stated that the company currently holds approximately $39 billion in order backlog. The funds raised will be used to pay for the costs of manufacturing these servers, with the remaining portion possibly used for debt repayment and general corporate expenditures. After the news was announced, Super Micro Computer, Inc.'s stock price fell by over 11% in after-hours trading, indicating that investors still have concerns about the dilution effect on the company and the previous underperformance. In December of last year, Super Micro Computer, Inc. reported revenue below analyst estimates, attributing it to "short-term delays" on the customer demand side. Additionally, the company faces increasing competition pressure from rivals such as Dell Technologies, Inc. Class C (DELL.US) and HP Inc. (HPQ.US). There is also a legal cloud looming over the company. In March of this year, U.S. federal prosecutors filed criminal charges against the company's co-founder, Yih-Shyan "Wally" Liaw, accusing him of violating U.S. export control regulations by illegally shipping billions of dollars' worth of NVIDIA Corporation-driven servers to China. While the indictment did not directly name Super Micro Computer, Inc. as a defendant, the company has included the negative publicity generated by this incident in its latest risk disclosure filing. Tech giants' "arms race" Super Micro Computer, Inc.'s financing actions are not unique. In fact, an unprecedented equity financing storm is spreading from the heart of Silicon Valley. Just at the beginning of this month, Alphabet Inc. Class C further expanded its announced financing plan to $84.75 billion, setting a new record for the largest single equity offering globally, far exceeding the previous record of $70 billion set by Brazilian oil giant Petroleo Brasileiro SA Sponsored ADR Pfd (PBR.US) in 2010. This funding comes from three channels: a $34.75 billion underwritten public offering, a continuous $40 billion ATM stock issuance mechanism starting in the third quarter, and a $10 billion private placement of shares to Berkshire Hathaway (BRK.A.US, BRK.B.US). Currently, Alphabet Inc. Class C has raised its capital expenditure guidance for 2026 to $180-190 billion, hinting at further substantial increases next year. This surge in financing swiftly spread to competitors in the industry. It is reported that Meta (META.US) is also considering a multi-billion-dollar equity financing plan to support its massive investment in the field of AI infrastructure. However, when the news came out, Meta's stock price plummeted over 5% on June 5th. Several investment banks have estimated that the total capital expenditure budget for the four Hyperscalers - Alphabet Inc. Class C, Microsoft Corporation (MSFT.US), Amazon.com, Inc. (AMZN.US), and Meta - in 2026 has exceeded $700 billion. Amazon.com, Inc. has provided guidance of around $200 billion, Microsoft Corporation is expected to reach around $190 billion, and the upper limit of Meta's guidance range has reached $145 billion. Faced with such large-scale targeted issuance and market sell-offs, concerns about dilution of shareholder equity are evident. However, on the other hand, mainstream institutions' analysis still favors the medium and long-term logic of this "computing power arms race." Goldman Sachs Group, Inc. recently updated its forecast for capital expenditure in hyperscale data centers from 2025 to 2030, stating that the capital expenditure of just the four Hyperscalers is expected to reach $5.3 trillion by the end of 2030, surpassing the GDP of over 200 countries including Japan, the UK, India, and France. At the same time, John Flood, Head of Stock Execution Services at the bank, pointed out that the current demand for new equity issuances is one of the strongest he has seen in his career. He stated that the large-scale issuance of major tech giants reflects healthy market demand, not speculative excess, and remains optimistic about the current U.S. stock market, saying, "We believe the recent pullback is a buying opportunity, and the path to 8,000 points or even higher on the S&P 500 Index this year is very clear."