Shares of the AI server maker hit a session low of $27.82 after authorities raided its Taiwan offices over alleged chip smuggling to China. The stock now sits below key moving averages.
Super Micro Computer (SMCI stock page) shares dropped 5.7% to $28.90 on Tuesday after authorities raided the company's offices in Taiwan as part of a chip smuggling investigation. The stock touched a session low of $27.82. Authorities raided the offices on allegations that SMCI may have violated export controls by shipping Nvidia processors to restricted buyers in China, according to a news report.
SMCI has a long history of accounting and governance issues. An independent board review last year found no evidence of fraud and said no financial restatements were needed. The company nevertheless continues to operate under a deferred prosecution agreement with the SEC. The investigation adds risk to SMCI's business model, which relies heavily on Nvidia's high-end GPUs for AI servers. The U.S. Commerce Department has the authority to impose fines and export license revocations, or even refer cases for criminal prosecution. Any of those outcomes would affect SMCI's ability to sell its highest-margin products.
On the chart, the stock sits below its 100-day moving average of $31.07 and the 200-day MA at $35.27. The price has oscillated around those levels for weeks after collapsing from a June high of $51.35. The next support is near $27.80, a swing low from late May. A break below that opens a path toward the year's low of $19.48, hit in March when the accounting concerns first resurfaced.
The raid triggered a rotation out of SMCI into rival Dell, whose shares rose 3.3% to $412.80. Dell has been winning server contracts from customers looking to diversify away from SMCI's operational uncertainty. The raid added to the perception that Dell is a safer counterparty, traders said.
AlphaScala's proprietary score puts SMCI at 47 out of 100, in the Mixed zone. The score reflects the tension between strong AI demand tailwinds and persistent regulatory overhang.
The session ended with SMCI at $28.79, down 5.4% from Monday's close. Volume ran well above the 30-day average, suggesting the news brought in fresh sellers rather than routine churn.
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