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▲ SMCI, Taiwan, Artificial Intelligence (AI) chip, stock price drop/AI generated image
SMCI (Super Micro Computer, SMCI) has once again seen investor sentiment freeze as it became embroiled in allegations of violating export regulations for AI chips from Taiwan. Despite a surge in Q3 revenue and a large order backlog, investigation risks and the burden of issuing $7 billion in new shares are weighing down the stock price.
According to financial media outlet FX Leaders on July 2nd (local time), SMCI's stock price continued to weaken in the aftermath of an investigation into alleged illegal chip exports to China. Taiwanese police have launched an investigation to confirm whether SMCI sent high-performance NVIDIA (NVDA) AI chips and servers to China.
Taiwanese police raided SMCI's Taiwan office and detained some employees, including managerial staff. The U.S. government restricts the sale of advanced AI chips to China, and investors are concerned that this investigation could lead to fines, business restrictions, and operational disruptions. The company stated that it is fully cooperating with the police investigation.
Looking solely at performance, growth remains strong. SMCI recorded $10.2 billion in Q3 revenue, a 123% increase compared to the same period last year. While demand for AI servers drove revenue expansion, revenue fell short of the company's own forecasts and also decreased compared to the previous quarter.
The company projected total revenue for fiscal year 2026 to be at least $36 billion. The secured order volume also amounts to approximately $39 billion, indicating remaining expectations for future growth. However, with investigation risks overshadowing earnings momentum, the market is reacting more sensitively to the potential for regulatory impact than to short-term growth.
Stock price pressure also coincided with the capital increase issue. SMCI announced last month that it would raise $7 billion through a new share issuance to procure chips and components necessary for AI server production. As concerns over the dilution of existing shareholders' stakes grew, selling pressure intensified, and the media reported that the stock price showed weakness at around $27.65.
[Article Key Summary]
-SMCI's stock price is under pressure due to the Taiwanese police investigation into alleged AI chip exports to China.
-Q3 revenue was $10.2 billion, a 123% increase year-over-year, and the order backlog reached approximately $39 billion.
-However, investigation risks and concerns over share dilution from the $7 billion new share issuance are suppressing expectations for earnings growth.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
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