TLDR
- Co-founder Wally Liaw was indicted for allegedly bypassing US export restrictions to China, triggering a fresh wave of selling.
- Major investors including Tortoise Capital have exited their positions, with Zacks Investment Management calling SMCI “uninvestable.”
- The stock has dropped about 65% since its near-term peak of $60.71 on July 30, 2024, and is now down 27% in 2026.
- SMCI trades at just over 7x forward earnings — well below its 10-year average of 12x — with a Wall Street consensus of “Hold.”
- Some investors remain cautiously bullish, citing SMCI’s role in AI infrastructure and projected fiscal 2026 revenue of over $40 billion.
Super Micro Computer has been one of the more dramatic stories in tech over the past year. The server maker sits right at the heart of the AI infrastructure boom, supplying data centers with the hardware needed to run large-scale AI workloads. Nvidia, which gets roughly 10% of its revenue from Super Micro, is one of its key partners. Yet despite all that, the stock can’t seem to stay out of trouble.
Super Micro Computer, Inc., SMCI
The latest blow came when co-founder Yih-Shyan “Wally” Liaw was indicted on charges of circumventing US export restrictions to China. Liaw has since resigned, and the company says it is cooperating with authorities. CEO Charles Liang and the company itself were not named as defendants. In a March 26 letter, Liang pointed to new oversight measures and the appointment of a new acting chief compliance officer.
But the market wasn’t reassured. Tortoise Capital sold its entire SMCI position from its Tortoise AI Infrastructure ETF last week. “The indictment was basically the driving factor behind us getting out,” said senior portfolio manager Rob Thummel.
Zacks Investment Management, which had already exited its position in 2025, went further. “In our view this is an uninvestable stock,” said chief market strategist Brian Mulberry. “Especially since the C-suite is involved, we would sit this out for the foreseeable future.”
A Pattern of Problems
This isn’t the first time Super Micro has been here. In 2019, the company failed to meet filing deadlines and was delisted from Nasdaq. It was relisted in 2020. Then, just last year, it was again forced to file missing financial reports to avoid another delisting and keep its spot in the S&P 500.
The stock had a remarkable run in 2023 and early 2024 as AI spending took off, hitting an all-time high of $118.81 in March 2024. Since peaking near $60.71 on July 30, 2024, the stock is down around 65% — making it the second-worst performer in the S&P 500 over that period.
Analyst sentiment has shifted noticeably. At the start of 2026, 10 of 23 tracked analysts had buy ratings. Today, that number has dropped to six, while sell ratings have risen from three to five. The Wall Street consensus is now a Hold, with an average price target of $31.70 — implying around 47% upside from current levels.
Some Bulls Still in the Corner
Not everyone is running for the exits. Gabelli Funds still holds SMCI in its Gabelli Global Technology Leaders ETF. Portfolio manager Hendi Susanto points to the company’s position on the short list of major AI server providers and a forward earnings multiple of just over 7x — well below its 10-year average of 12x and the S&P 500’s roughly 19x.
Louis Navellier of Navellier & Associates, a long-time holder, sees the departure of Liaw as a net positive. “The fact that he’s gone I think helps, and they’re apparently cooperating with the DOJ, which is great,” he said.
Super Micro is expected to generate over $40 billion in revenue in fiscal 2026, an 87% jump from the prior year. Bloomberg Intelligence analyst Woo Jin Ho noted that while near-term sales execution likely remains intact, the indictment “could drive customers to seek more supplier diversity, pressuring 2027 revenue.”
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