TLDR
- Shareholders filed a class action lawsuit against Super Micro Computer (SMCI) in San Francisco federal court
- The suit claims SMCI hid that a large portion of its server sales went to Chinese companies, violating U.S. export laws
- SMCI stock dropped 33% on March 20 after the DOJ announced criminal smuggling charges against co-founder Yih-Shyan Liaw and two others
- The alleged smuggling scheme involved Nvidia-powered servers worth $2.5 billion in sales across 2024 and 2025
- Analysts have cut price targets, with Wall Street holding a consensus “Hold” rating and an average target of $31.70
Super Micro Computer has had a rough week — and it’s not getting any easier.
Super Micro Computer, Inc., SMCI
Shareholders filed a class action lawsuit in San Francisco federal court on Wednesday, accusing the AI server maker of securities fraud. The suit claims SMCI knowingly hid that a large chunk of its server revenue came from sales to Chinese companies, in violation of U.S. export control laws.
The complaint names CEO Charles Liang and CFO David Weigand as co-defendants alongside the company.
The lawsuit targets investors who bought SMCI stock between April 30, 2024, and March 19, 2026. It seeks unspecified damages.
This all follows a dramatic March 20 selloff. SMCI stock dropped 33% in a single session after the Department of Justice announced criminal smuggling charges against co-founder and director Yih-Shyan Liaw, Taiwan sales manager Ruei-Tsang Chang, and contractor Ting-Wei Sun.
According to DOJ prosecutors, Liaw and Chang used an unnamed Southeast Asian company as a pass-through to sell Nvidia-powered servers to restricted buyers in China. The alleged scheme generated $2.5 billion in server sales during 2024 and 2025.
Super Micro itself has not been named as a defendant in the DOJ case. The company said it has been “fully cooperating” with the government’s investigation.
That hasn’t stopped the shareholder lawsuit from landing, though. The complaint accuses SMCI of overstating its business outlook and deliberately concealing material weaknesses in its export compliance controls.
Analysts Cut Price Targets
The fallout has prompted several Wall Street analysts to revise their outlooks.
Rosenblatt Securities analyst Kevin Cassidy trimmed his price target to $32 from $50, while keeping a Buy rating. He said the controversy puts “a dark cloud” over what would have been a strong product announcement period. He still sees SMCI’s order backlog as sound but expects the stock to stay under pressure until the investigation wraps up.
Bank of America’s Ruplu Bhattacharya was less forgiving. He cut his target to $24 from $34 and kept a Sell rating. He flagged risks including suppliers restricting component access, customers pausing orders, and the potential for rivals to pick up displaced contracts.
Where Wall Street Stands
Currently, Wall Street has a consensus Hold rating on SMCI. That’s based on eight Hold calls, three Buys, and three Sells.
The average price target sits at $31.70, implying roughly 32% upside from current levels.
SMCI stock is down about 18% year-to-date heading into the final days of March.
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