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Why SMCI stock plunged 11% today

Published 03/19/2024, 07:26 AM
Updated 03/19/2024, 11:17 AM

Super Micro Computer (NASDAQ:SMCI) stock fell in New York trading Tuesday after the company said it is planning to offer 2 million shares of its common stock in a public sale. This way, the company is capitalizing on the fact that SMCI stock is up 252% year-to-date.

SMCI stock was down 11.5% at 11:15 ET (15:15 GMT).

Super Micro also plans to give the underwriter, Goldman Sachs, the option to buy up to an additional 300,000 shares within 30 days, it said in a filing. Goldman Sachs is the only underwriter and manager for this sale, handling the process and potential transactions.

Bloomberg News reported that Super Micro is offering shares in the range of $900 to $1000.68. At the time of writing, SMCI stock is indicated to open at $906.00.

Super Micro Computer designs and builds high-performance servers and it has been a major AI beneficiary. Rosenblatt analysts recently hiked their price target on SMCI stock to $1300.

“Key to the story is for investors to consider that the company is benefiting not only from secular AI growth (over 50% CAGR over next several years) but material share gains,” they wrote in a note.

“We anticipate these gains to reach double digits in the next couple of years, up from the current mid-single digits, with a particular focus on enterprise,” analysts added.

Super Micro Computer stock fell 6.4% yesterday.

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