DVB
Deep-Value Investor, Ex-Tech Executive, Agentic Equity Research Builder
Super Micro Computer is not to be trusted given its continued history of accounting fraud, and there are far better investments without that risk. The stock just dropped below $30 after smuggling $2.5B worth of Nvidia GPUs to China, which was no surprise. x.comÂ
Super Micro Computer is not worth the risk regardless of its business or multiple, given early signs of sketchy business that have now escalated. Per @WOLF_Financial, its co-founder was charged with smuggling about $2.5B of servers with Nvidia AI chips to China via a Southeast Asian shell company, using fake paperwork and dummy servers to fool the compliance team. x.comÂ
Super Micro should benefit as data centers buy the servers that house Nvidia's AI chips. Its quarterly sales outlook rose from $15B to $19B; the stock is 36% below its high and trades at 8x next year's earnings. It is a double from here. x.com x.comÂ
Super Micro's export-control indictment is a high-severity governance event that reaches the core of the investment case. The DOJ charged co-founder and director Wally Liaw and two others, alleging about $510M of servers were diverted to China through concealment; the company isn't a defendant. The $2.5B channel is about 11% of FY2025 revenue, material but not existential. It lands on unremediated control weaknesses after EY resigned, and a 6.3% gross margin with negative operating cash flow. … Show more
Super Micro Computer's CEO reeks of questionable character, and Taiwan's raid on its offices in an expanding chip-export probe adds to the concern. The open questions are how severe any fraud is and whether it is already priced in. x.comÂ
Super Micro Computer's nearly 40% drop over the past month is a market overreaction, since the allegations targeted a director, not the company, and found no company wrongdoing. Some of the pressure may have been competitor-driven or politically amplified. What matters is engineering strength: it builds roughly all of xAI's servers, is involved early in Terafab, and is often the first partner AI-chip startups such as d-Matrix turn to. It remains a long-term hold. x.comÂ
Super Micro Computer has been rotten from the beginning, a stock to avoid when so many peers are available. Per @StockMKTNewz, citing CNBC, US prosecutors have charged a Super Micro co-founder, employee and contractor with smuggling Nvidia chips to China, yet the stock is only down about 3%. x.com x.comÂ
Super Micro Computer is a company to avoid on fraud concerns after its co-founder was arrested in an alleged $2.5 billion Nvidia chip smuggling scheme, per Zerohedge. x.comÂ
Super Micro Computer is getting too cheap to ignore even if its earnings are questionable; its management is the main reason the stock is weak. Without them the shares would likely already be much higher, and @NebbioloNerd says the market will never trust the team and the stock would rip to $50+ if Liang and others stepped aside. The case leans on Trump being in office. x.comÂ
Super Micro Computer should come off the watchlist because its administrative team has a criminal history. x.comÂ