SMCI CEO Arrested For Smuggling $2.5 billion Of Nvidia GPUs
In a Nutshell
Super Micro (SMCI) co-founder arrested for allegedly smuggling $2.5B in Nvidia GPUs to China, causing SMCI stock to drop 12-13% after hours amid razor-thin gross margins (3% on $28B revenue) and past accounting issues. Stock surged 270% from $30 to $120 in early 2024 as an Nvidia proxy but faces volatility; potential V-shaped recovery if allegations prove false, or new lows if true. Watch for trading opportunities at $30-33 support, with live sessions recommended for market updates amid NASDAQ consolidation.
These notes were generated by AI and may contain inaccuracies.
Super Micro co-founder arrested for smuggling $2.5 billion worth of Nvidia GPUs to China. Super Micro (SMCI) stock down 12% after market hours. All alleged; if untrue, possible V-shaped recovery. If true, not looking good for publicly traded company allegedly smuggling $2.5 billion in possibly Nvidia chips. US officials did not confirm chip names in alleged scheme, but Nvidia dominates AI chips market with highest prices.
Company doing so poorly it resorts to reselling Nvidia chips to China. Super Micro revenue $30.5 billion, net income $872 million. Holds $2.5 billion in Nvidia chips. Revenue increasing, but gross margins terrible: revenue $28 billion, cost of goods sold $25 billion, left with $879 million gross profit. Razor thin margins; companies with such margins fail. Pro research notes suffers from weak gross profit margins.
Stock pumped from lows of $30 to highs of $123 in 2024. Warned beginners to be careful due to aggressive momentum-based moves. On January 16, 2024, trading at $31 lows; by late March 2024, up 270% to $120 (nearly 3x in 2-2.5 months). Acted as Nvidia proxy due to partnership: sells Nvidia chips, allegedly to China.
Nvidia up 38%. SMCI history includes accounting fraud, possible removal from public trading. No surprise if involved in AI company or chip partner misfortune.
Down 13% after hours, but alleged. Traded at support/resistance $30-$33 consolidation. If not as bad, possible buy the dip for 17-20% return to previous highs. If worse, new lows. Stock to watch tomorrow due to volatility; may discuss in live trading session, not necessarily trade it.
Join live trading sessions to digest news, tensions in Iran. Feedback indicates it helps understand data. Try tomorrow; second link in description. See at NASDAQ market open.
NASDAQ consolidating, testing oversold reversal. Pushed up at close on false news Iran war over (rumored before). May say anything to save market. Watch if recovers or rejected to new lows; discuss tomorrow.
Hope to see in live trading session, second link below. End year on green note.
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