Super Micro Computer (NASDAQ:SMCI) Stock Price Down 28% - Should You Sell?

Key Points

• Super Micro Computer fell 28% in heavy trading after announcing plans to raise $7 billion through equity offerings, with investors worried the financing could dilute existing shareholders.
• The company also disclosed about $39 billion in recent AI server orders from more than 20 customers, underscoring strong demand for its AI infrastructure products despite the stock selloff.
• Broader weakness in tech and AI stocks added to the decline, while analysts currently rate SMCI Hold on average with a consensus price target of about $39.

Super Micro Computer, Inc. (NASDAQ:SMCI - Get Free Report) dropped 28% during trading on Wednesday . The company traded as low as $29.14 and last traded at $29.27. Approximately 186,260,500 shares changed hands during trading, an increase of 372% from the average daily volume of 39,440,336 shares. The stock had previously closed at $40.64.

Super Micro Computer News Roundup

Here are the key news stories impacting Super Micro Computer this week:

• Negative Sentiment: Super Micro said it will raise $7 billion to fund component purchases for AI server orders, but the financing plan is pressuring the stock because investors are worried about shareholder dilution. Reuters: Super Micro Computer plans to raise $7 billion in equity offerings
• Positive Sentiment: The company also disclosed that it has received about $39 billion in recent AI server orders from more than 20 customers, highlighting very strong demand for its AI infrastructure products. Yahoo Finance: Supermicro Announces Proposed $7.0 Billion of Equity and Equity-linked Financing Transactions To Fund AI Orders
• Neutral Sentiment: Broader weakness in tech and AI-related stocks added to the selling pressure, making SMCI part of a wider momentum-stock selloff rather than an isolated move. Yahoo Finance: Stock Market Today

Wall Street Analysts Forecast Growth

SMCI has been the topic of a number of recent research reports. Barclays reduced their target price on shares of Super Micro Computer from $38.00 to $34.00 and set an "equal weight" rating on the stock in a research report on Wednesday, May 6th. Northland Securities boosted their target price on shares of Super Micro Computer from $22.00 to $34.00 in a research report on Wednesday, May 6th. Bank of America reduced their target price on shares of Super Micro Computer from $34.00 to $24.00 and set an "underperform" rating on the stock in a research report on Tuesday, March 24th. JPMorgan Chase & Co. boosted their target price on shares of Super Micro Computer from $28.00 to $32.00 and gave the stock a "neutral" rating in a research report on Wednesday, May 6th. Finally, The Goldman Sachs Group reissued a "sell" rating on shares of Super Micro Computer in a research report on Wednesday, May 6th. Four equities research analysts have rated the stock with a Buy rating, eleven have issued a Hold rating and two have assigned a Sell rating to the company's stock. According to data from MarketBeat.com, the stock has a consensus rating of "Hold" and an average target price of $39.00.

Super Micro Computer Price Performance

The company's 50-day moving average price is $31.83 and its two-hundred day moving average price is $31.24. The company has a market cap of $17.63 billion, a P/E ratio of 15.51, a P/E/G ratio of 0.73 and a beta of 1.87. The company has a current ratio of 2.66, a quick ratio of 1.29 and a debt-to-equity ratio of 0.88.

Super Micro Computer (NASDAQ:SMCI - Get Free Report) last released its earnings results on Tuesday, May 5th. The company reported $0.84 earnings per share for the quarter, topping the consensus estimate of $0.63 by $0.21. The company had revenue of $10.24 billion during the quarter, compared to the consensus estimate of $12.39 billion. Super Micro Computer had a net margin of 3.70% and a return on equity of 17.49%. The company's revenue was up 122.7% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.31 EPS. Super Micro Computer has set its Q4 2026 guidance at 0.650-0.790 EPS. As a group, sell-side analysts expect that Super Micro Computer, Inc. will post 2.12 earnings per share for the current year.

Institutional Investors Weigh In On Super Micro Computer

Several hedge funds and other institutional investors have recently modified their holdings of SMCI. Vanguard Group Inc. raised its holdings in shares of Super Micro Computer by 4.1% during the third quarter. Vanguard Group Inc. now owns 68,848,777 shares of the company's stock worth $3,300,610,000 after purchasing an additional 2,695,829 shares during the period. Geode Capital Management LLC raised its holdings in shares of Super Micro Computer by 0.3% during the fourth quarter. Geode Capital Management LLC now owns 13,808,499 shares of the company's stock worth $402,627,000 after purchasing an additional 41,314 shares during the period. Invesco Ltd. raised its holdings in shares of Super Micro Computer by 21.2% during the fourth quarter. Invesco Ltd. now owns 9,953,780 shares of the company's stock worth $291,347,000 after purchasing an additional 1,738,749 shares during the period. Disciplined Growth Investors Inc. MN raised its holdings in shares of Super Micro Computer by 16.5% during the second quarter. Disciplined Growth Investors Inc. MN now owns 9,730,773 shares of the company's stock worth $476,905,000 after purchasing an additional 1,381,046 shares during the period. Finally, Norges Bank acquired a new stake in shares of Super Micro Computer during the fourth quarter worth $136,569,000. Institutional investors own 84.06% of the company's stock.

About Super Micro Computer

Super Micro Computer, Inc (Supermicro) is a technology company that designs, develops and manufactures high-performance server, storage and networking solutions for enterprise, cloud, data center, high performance computing (HPC) and edge computing customers. The company's product portfolio includes rackmount and blade servers, storage subsystems, motherboards, chassis, power supplies and networking components, with an emphasis on high-density, energy-efficient configurations and platforms optimized for GPU-accelerated workloads and artificial intelligence applications.

Headquartered in San Jose, California, Supermicro combines in-house engineering with a global manufacturing and distribution footprint to deliver configurable, application-specific systems.

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