David Prince
US Equity/Options Fund Manager, Mentor at T3 Live
Super Micro is burning shareholder money with a $7B equity and equity-linked financing. The company says proceeds will fund components for about $39 billion of AI server orders from more than 20 customers, but needing outside money to fill orders is either a sign of a very good business or what it hopes investors will believe. x.com x.com x.com
Super Micro Computer's roughly $7B equity and equity-linked financing plan to fund AI server component purchases is a short-term overhang on the stock, even though it signals strong demand. The market reads it as shareholder dilution, further proof the business is highly capital intensive, execution risk in turning a huge backlog into profitable cash flow, and growth funded with new paper rather than internal cash. Broader AI hardware weakness played a smaller role. x.com
Super Micro Computer's $7 billion equity raise is heavy dilution to fund AI spending, and the market is never going to like a raise that large. The stock sold off on the news, fitting a broader weakness theme around dilution for AI spend. x.com x.com x.com
Increased AI-platform demand is lifting Super Micro Computer's preliminary revenue above guidance. Supermicro estimates fiscal Q1 2027 revenue of $18.5B-$19.5B versus $14.5B-$15.5B guided, and gross margin of 12%-12.5% versus 10.4%-10.8% guided, primarily due to customer and product mix. No one is bullish enough on the stock; $50+ by year-end is in view. x.com x.com x.com
Super Micro's planned $7 billion equity and equity-linked financing, reported by @zerohedge, shows the company taking advantage of an overvalued stock. x.com
Super Micro's proposed $7.0 billion of equity and equity-linked financing to fund AI orders is huge next to its $24B market cap. Its claim of $39B in AI server orders deserves skepticism, since the company does not have the best track record. x.com x.com
Super Micro should benefit as data centers buy the servers that house Nvidia's AI chips. Its quarterly sales outlook rose from $15B to $19B; the stock is 36% below its high and trades at 8x next year's earnings. It is a double from here. x.com x.com
Financing announcements point to more accelerator demand, supporting semiconductors. About $200bn in announced Meta, Anthropic/Broadcom and SpaceX/Nvidia financing likely drives $400bn in XPU purchases. Data centers burn cash until lit, then cash flow 20-40% annually; AI spend rising from 0.1% to 0.5-1% of current payroll could balance the buildout if agents replace roles. Sustainable token demand is the bet, but smaller local models are the bigger risk, though not an immediate concern. x.com … Show more
Super Micro Computer is hard to invest in despite its absurd guidance, because what management did leaves zero trust in it. x.com
Meta's unmet AI demand pays its bottleneck suppliers. Super Micro's $19.5B quarterly outlook and under 8x forward earnings point to a double. CoreWeave's Meta deals total $35.2B; it should easily top $100. Builders say nearly all new sites use Dell or Super Micro; Dell could easily double. Micron's demand is off the charts at 5x forward earnings. Sources say Vertiv's gear is sold out for 2-3 years. VivoPower has 2GW+ potential in 5-7 years. Digi Power X has a $1.1B Cerebras deal. x.com x.com … Show more
Super Micro Computer is not worth touching regardless of where the stock goes, because its margin profile does not fit a disciplined investment approach and its CEO is a concern, among other reasons. That does not rule out the stock going higher. x.com x.com
