$SUPER MICRO COMPUTER INC(SMCI)$ Short-term pain is significant, but long-term gain is even greater.
Known:
- $39B worth of orders from 20 companies.
- A $7B equity financing that results in $1.25B in common equity (SMCI) and $3.75B as depository shares (SMCIP) in June, with $5B available immediately and a $2B At-The-Market (ATM) program in Q3/2026.
Speculated:
- The massive orders likely expand beyond traditional META and Coreweave to include other hyperscalers and large enterprises.
- Rolling fulfillment could start as early as late 2026 and continue for 12 to 18 months.
My take on the AI boom trading strategy:
- Buyers (Mega cap-ex spenders): May remain under pressure until their massive investments translate into significant revenue/profit growth.
- Pure sellers (e.g., most chip stocks, especially memory and infrastructure builders): Could benefit immediately from the massive orders.
- Value-added players (e.g., Dell and SMCI): They are both buyers of chips and sellers of servers, so they should benefit. However, SMCI needed funding to fulfill the big orders.
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