Key Takeaways
- Wally Liaw, co-founder of Super Micro Computer, faces federal charges for allegedly evading US export controls on shipments to China.
- Institutional investors including Tortoise Capital have liquidated their holdings, with analysts at Zacks labeling the stock “uninvestable.”
- Shares have plummeted approximately 65% from the July 30, 2024 high of $60.71, extending 2026 losses to 27%.
- The company’s valuation sits at roughly 7x forward earnings, significantly below its historical 10-year average of 12x, while Wall Street maintains a “Hold” rating.
- Despite the turmoil, select investors maintain positions, pointing to SMCI’s critical position in AI server infrastructure and fiscal 2026 revenue projections exceeding $40 billion.
Super Micro Computer has experienced a turbulent 12-month period that rivals any soap opera in the tech sector. As a leading supplier of server technology powering AI data centers, the company occupies a strategic position in the artificial intelligence infrastructure expansion. The firm counts Nvidia among its major partners, with approximately 10% of the chip giant’s revenue flowing through Super Micro channels. This advantageous market position has done little to shield the company from mounting challenges.
Super Micro Computer, Inc., SMCI
The most recent crisis emerged when federal prosecutors charged co-founder Yih-Shyan “Wally” Liaw with violating US export control regulations in transactions involving China. Following the indictment, Liaw stepped down from his position. The company has publicly stated its commitment to working with federal investigators. CEO Charles Liang and the corporation itself were not included in the criminal charges. Liang addressed stakeholders in a March 26 communication, highlighting the implementation of enhanced compliance protocols and the designation of a new interim chief compliance officer.
Market participants responded with swift action. Tortoise Capital liquidated its complete SMCI stake from the Tortoise AI Infrastructure ETF during the previous week. Senior portfolio manager Rob Thummel stated, “The indictment was basically the driving factor behind us getting out.”
Zacks Investment Management, having already divested its holdings in 2025, issued a stronger assessment. Chief market strategist Brian Mulberry declared, “In our view this is an uninvestable stock. Especially since the C-suite is involved, we would sit this out for the foreseeable future.”
A History of Regulatory Hurdles
Super Micro’s current troubles echo previous episodes. The company missed critical filing deadlines in 2019, resulting in Nasdaq delisting. Reinstatement came in 2020. History appeared to repeat itself last year when the company scrambled to submit overdue financial documents, narrowly avoiding another delisting and preserving its S&P 500 membership.
The AI spending surge of 2023 and early 2024 propelled Super Micro shares to unprecedented heights, reaching an all-time peak of $118.81 in March 2024. From the more recent local maximum of $60.71 reached on July 30, 2024, the stock has surrendered roughly 65% of its value, earning the dubious distinction of being among the S&P 500’s worst performers during this timeframe.
Wall Street analyst coverage reflects shifting sentiment. Early 2026 saw 10 of 23 monitored analysts recommending purchase, while current tallies show just six buy ratings alongside an increase in sell recommendations from three to five. The prevailing consensus has settled on Hold, with the average analyst price objective landing at $31.70, suggesting potential upside of approximately 47% from present trading levels.
Contrarian Voices Remain
The exodus has been far from universal. Gabelli Funds continues to maintain SMCI within its Gabelli Global Technology Leaders ETF portfolio. Portfolio manager Hendi Susanto emphasizes the company’s membership in the exclusive group of major AI server manufacturers and highlights the attractive forward earnings multiple hovering above 7x, materially lower than both the 10-year historical average of 12x and the S&P 500’s approximately 19x valuation.
Louis Navellier of Navellier & Associates, who has maintained a long-term position, interprets Liaw’s departure favorably. “The fact that he’s gone I think helps, and they’re apparently cooperating with the DOJ, which is great,” he commented.
Fiscal 2026 revenue projections for Super Micro exceed $40 billion, representing an 87% surge compared to the previous fiscal year. Bloomberg Intelligence analyst Woo Jin Ho acknowledged that immediate-term sales momentum appears sustainable, while cautioning that the legal proceedings “could drive customers to seek more supplier diversity, pressuring 2027 revenue.”
