Key Takeaways
- Co-founder Yih-Shyan “Wally” Liaw faces federal indictment over allegations of circumventing export controls to China, sparking another selloff.
- Institutional investors like Tortoise Capital have dumped their entire holdings, while Zacks labeled the stock “uninvestable.”
- Shares have plummeted approximately 65% from their July 2024 near-term high of $60.71, and remain down 27% year-to-date in 2026.
- The company trades at roughly 7x forward earnings — significantly discounted from its historical 10-year average of 12x — with analyst consensus at “Hold.”
- A minority of investors maintain cautious optimism, highlighting SMCI’s critical position in AI server infrastructure and anticipated fiscal 2026 revenue exceeding $40 billion.
Super Micro Computer’s journey through the past year reads like a cautionary tale for tech investors. As a crucial supplier of server hardware powering AI data centers, the company occupies a strategic position in the artificial intelligence infrastructure revolution. With Nvidia deriving approximately 10% of its revenue from Super Micro, the partnership underscores the company’s market importance. Despite these advantages, the stock continues to face relentless headwinds.
Super Micro Computer, Inc., SMCI
The most recent setback emerged when federal prosecutors indicted co-founder Yih-Shyan “Wally” Liaw on allegations of evading US export controls in dealings with China. Following the indictment, Liaw stepped down from his position, with the company pledging full cooperation with federal authorities. Notably, CEO Charles Liang and the corporation itself were not named as defendants in the case. Through a March 26 correspondence, Liang outlined enhanced compliance protocols and announced the appointment of a new interim chief compliance officer.
Market reaction proved swift and unforgiving. Tortoise Capital liquidated its complete SMCI stake from the Tortoise AI Infrastructure ETF within days. “The indictment was basically the driving factor behind us getting out,” senior portfolio manager Rob Thummel explained.
Zacks Investment Management, having already divested its holdings in 2025, took an even harsher stance. 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.”
History Repeating Itself
This marks yet another chapter in Super Micro‘s troubled regulatory history. The company faced delisting from Nasdaq in 2019 after missing crucial filing deadlines, only to regain its listing status in 2020. More recently in 2025, the firm scrambled to submit overdue financial statements to prevent another delisting and preserve its S&P 500 membership.
The stock experienced extraordinary momentum throughout 2023 and into early 2024, riding the wave of surging AI infrastructure investment to reach an all-time peak of $118.81 in March 2024. From its more recent near-term summit of $60.71 achieved on July 30, 2024, shares have collapsed roughly 65% — ranking as the second-worst performance within the S&P 500 index during this timeframe.
Wall Street analyst coverage reflects growing pessimism. Early 2026 saw 10 out of 23 monitored analysts recommending the stock as a buy. Current figures show only six buy ratings remain, while sell recommendations have climbed from three to five. The prevailing consensus stands at Hold, with an average price objective of $31.70 — suggesting potential upside of approximately 47% from present trading levels.
Contrarian Voices Remain
Yet not all institutional players have abandoned ship. Gabelli Funds continues maintaining SMCI exposure through its Gabelli Global Technology Leaders ETF. Portfolio manager Hendi Susanto emphasizes the company’s exclusive positioning among elite AI server manufacturers and its compressed forward earnings multiple of just over 7x — substantially below both its 10-year historical average of 12x and the S&P 500’s current valuation around 19x.
Louis Navellier of Navellier & Associates, a long-standing shareholder, 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 stated.
Analysts project Super Micro will deliver revenue surpassing $40 billion during fiscal 2026, representing an explosive 87% increase over the previous fiscal year. Bloomberg Intelligence analyst Woo Jin Ho acknowledged that while immediate-term sales momentum appears sustainable, the indictment “could drive customers to seek more supplier diversity, pressuring 2027 revenue.”
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