Super Micro Computer Inc. (SMCI) shares took a hit in extended trading Tuesday after the company revealed plans to raise $7 billion to buy components for a flood of AI server orders.

After the market closed, Super Micro announced a series of offerings: a $1.25 billion common stock offering, a $3.75 billion depositary shares offering, and an at-the-market offering of up to $2 billion expected to start in the third quarter. The goal is to raise cash to purchase components needed to fulfill orders the company received in "recent weeks."

And those orders are big. Super Micro said it has received roughly $39 billion in orders from more than 20 customers. That's a huge vote of confidence in the AI boom. But here's the catch: to fund those orders, the company is issuing a lot of new stock. The $7 billion raise represents significant dilution for existing shareholders, and the market is not thrilled.

As of March 31, Super Micro had about $1.3 billion in cash and equivalents. The new capital will help bridge the gap, but investors are selling first and asking questions later.

SMCI Price Action: Super Micro shares were down 8.96% in after-hours trading Tuesday, trading at $37 at the time of publication, according to market data.