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.
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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.
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