Super Micro Computer (NASDAQ:SMCI) stock declined by about 9% in yesterday’s trading session after the company announced plans to sell two million shares in a public offering. With this equity offering, SMCI aims to capitalize on an impressive 824% rally over the past year, thanks to the artificial intelligence (AI) craze.
Upon the completion of the public offering, Super Micro will have over 58.5 million shares outstanding. SMCI is expected to raise about $2 billion based on Monday’s closing price of $1,000.68.
Furthermore, the proposed offering will be underwritten solely by Goldman Sachs (GS) and will be granted a 30-day option to purchase up to 300,000 additional shares. Importantly, SMCI plans to use the proceeds from the offering to support its operations by purchasing inventory, expanding manufacturing capacity, and raising investments in research and development.
Innovative Products Fuel Expansion
The future outlook for Super Micro appears favorable due to the robust demand for its product offerings. Furthermore, the company’s projection to double its Fiscal 2024 revenue from the previous year’s sales of $7.12 billion points to management’s confidence in SMCI’s continued strong performance.
Interestingly, earlier this week, the company revealed new generation AI systems to provide users with improved efficiency for their AI projects. Additionally, SMCI launched three new NVIDIA-based, full-stack superclusters to help accelerate AI and deep learning applications. Thus, these new product introductions might help SMCI maintain its strong position in the AI race.
Is SMCI Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on the stock based on six Buys and three Holds assigned in the past three months. The analysts’ average price target on SMCI stock of $983 per share implies 7.91% upside potential.
