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Super Micro Computer Inc (NASDAQ:SMCI) shares fell roughly 9% in premarket trading on Wednesday after the company unveiled plans for a major capital raise aimed at funding its rapidly expanding artificial intelligence server business.

The fundraising package totals approximately $7 billion and is intended to provide the company with the resources needed to address a growing order backlog linked to demand for AI infrastructure.

The financing plan combines a $5 billion underwritten public offering with a separate $2 billion at-the-market equity programme.

Management has structured the transaction to provide both near-term capital and longer-term flexibility as the company scales production to meet customer requirements.

The public offering itself consists of two components. Supermicro plans to issue $1.25 billion of common stock and $3.75 billion of mandatory convertible preferred securities through depositary shares.

The additional $2 billion at-the-market programme is expected to commence no earlier than the third quarter of 2026, allowing the company to access capital gradually depending on market conditions and operational requirements.

The market’s negative reaction highlights investor concerns about the substantial investment required to support the artificial intelligence infrastructure boom.

While the fundraising reflects strong customer demand, it also underscores the significant capital commitments needed by hardware providers to secure advanced components and expand manufacturing capacity.

Supermicro said the proceeds will primarily be used to purchase parts and components required to fulfil approximately $39 billion of recently secured customer orders.

The backlog includes more than 20 customers seeking advanced AI server platforms and the company’s Data Center Building Block Solutions over the coming quarters.

Management believes the capital raise will strengthen the company’s ability to execute against its growing order book while providing additional flexibility as it navigates global supply chain challenges.

The staggered structure of the fundraising is designed to give Supermicro access to liquidity over an extended period, helping the company respond to fluctuations in component availability and customer demand.

As AI infrastructure investment continues to accelerate, the company is seeking to ensure it has sufficient resources to maintain delivery schedules and support future growth opportunities.

Super Micro Computer Inc. is a provider of high-performance computing, storage and networking solutions. The company specialises in server systems used in cloud computing, artificial intelligence, enterprise data centres and edge computing applications. Supermicro has become a major beneficiary of rising demand for AI infrastructure, supplying systems built around advanced processors and accelerators from leading semiconductor manufacturers.

Super Micro Computer stock price