Shares in tech company Supermicro Computer’s (SCMI) stock fell as much as 16% on Wednesday, one of the steepest single-day falls in the tech market today. The AI server maker announced plans to raise approximately $7 billion through a combination of equity and equity-linked financing. Supermicro said the capital will be used to purchase components to fulfill roughly $39 billion in AI server orders it received in recent weeks. Investors did not welcome the financing plans, sending SMCI stock down double digits as the market opened.

To finance the necessary component purchases, Supermicro is launching concurrent underwritten public offerings totaling $5 billion, comprising roughly $1.25 billion in common stock and approximately $3.75 billion in depositary shares. The company is also establishing an at-the-market offering program of up to $2 billion for common stock, with sales expected to begin no earlier than the third quarter of 2026.

Shares of Supermicro extended declines from Tuesday, when the stock dropped 12%. Year to date, the stock is still up 13% amid a boom in AI server demand. However, the recent decline does have analysts worried. The equity and equity-linked financing will likely increase the number of outstanding shares, potentially reducing the value of existing holdings, according to analysts.

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Wall Street remains mix on the AI bull rush that has hit markets in the last year. While AI stocks like Nvidia (NVDA) and Micron (MU) have surged to record levels, the market still has plenty of volatility. Despite its strong quarterly earnings report in May, Supermicro remains a volatile tech stock asset.