Super Micro Stock Falls as DOJ Probe Examines China Smuggling Links

Super Micro shares fall on DOJ probe

Super Micro Computer shares tumbled after Bloomberg reported that the U.S. Justice Department is investigating whether entities linked to Alice Huang were involved in efforts to smuggle Super Micro products into China. Investing.com reported the stock fell 12%, while Blockonomi reported it traded near $28.80, down about 5%, with earlier reports putting the drop as deep as 12%. Blockonomi also reported the stock was down 5.34% at $28.80 at the time of Benzinga’s report on Thursday.

Details of the investigation

The scrutiny is being led by the U.S. attorney’s office in Manhattan, according to a person familiar with the matter cited by Bloomberg. It remains unclear whether the investigation is connected to existing semiconductor-smuggling cases brought by U.S. or Asian prosecutors.

The DOJ is already investigating Alice Huang’s former company, Megaspeed International, over suspected semiconductor smuggling. Megaspeed has denied wrongdoing.

The allegations intersect with an existing criminal case involving Super Micro co-founder Yih-Shyan "Wally" Liaw, whom Manhattan federal prosecutors charged in March alongside two others over an alleged conspiracy to ship Nvidia-powered servers to an unnamed Southeast Asian company before diverting them to Chinese customers. Super Micro was not named as a defendant and has said it is cooperating with the investigation. Liaw, who pleaded not guilty, is no longer with the company.

Nvidia context and earnings

The reports come amid the fallout from Jensen Huang’s departure from Nvidia. Nvidia shares remained down around 5% following the announcement, according to Investing.com. Blockonomi reported Nvidia stock fell about 5% to $164.32 after Jensen Huang’s exit as CEO, and that Colette Kress is interim CEO and Harvey C. Jones is the company’s first board chair.

There is currently no indication that prosecutors intend to bring criminal charges against Nvidia or Jensen Huang. It is also unclear what role, if any, Alice Huang or entities connected to her may have played in the alleged smuggling of Super Micro products. DOJ investigations can conclude without charges.

Blockonomi reported Super Micro beat earnings estimates on Nov. 3 and raised its fiscal 2027 revenue forecast. Earnings came in at $1.81 per share, above the $1.23 analysts expected. Revenue jumped about 297% from a year ago to $19.95 billion, versus the $16.39 billion Wall Street had expected. The company lifted its fiscal 2027 revenue forecast to a range of $72 billion to $82 billion, compared with the $69.17 billion analysts had expected.

Why it matters

The DOJ probe adds legal uncertainty for Super Micro while the company reports strong earnings and a raised revenue forecast. The investigation’s connection to existing smuggling cases and to Nvidia remains unclear, and no charges have been indicated against Nvidia, Jensen Huang, or Super Micro itself.

Sources

• investing.com: Super Micro sinks as DOJ probes possible China smuggling links to Nvidia fallout By Investing.com
• blockonomi.com: Super Micro (SMCI) Stock Falls 5% as DOJ Probe Eyes Alice Huang Links - Blockonomi

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.