Super Micro Shares Drop Over 11% Despite Recent Rally as $1.5B Offering Signals Growth Hurdles
• Super Micro Computer (SMCI) shares dropped 11.3% on Friday despite recently doubling over the past month • The company announced a plan to raise $1.5 billion through a convertible note offering, which will be dilutive to existing shareholders • Investors had pushed shares higher recently amid hype around artificial intelligence and Nvidia's strong earnings report • However, Super Micro is much less profitable than Nvidia with lower and declining gross margins • Investors may be realizing Super Micro doesn't have the same profitable AI business as Nvidia, prompting profit taking