SMCI

Super Micro Computer Inc. (NASDAQ:SMCI) shares are extending losses Friday, a day after reports of a Justice Department probe sent the stock tumbling, as NVIDIA Corp. (NASDAQ:NVDA) slips again, bringing other technology stocks down with it amid general market weakness. Here’s what you should know.

• Super Micro Computer shares are sliding. Why is SMCI stock falling?

Bloomberg Report Adds Smuggling Angle to DOJ Scrutiny

Thursday’s selloff began with a Semafor report in which two administration officials described three separate Justice Department inquiries. One is an antitrust probe of Nvidia. The other two target Megaspeed and Supermicro, and both reportedly center on Alice Huang, who is alleged to have spied for China and whom former Nvidia CEO Jensen Huang acknowledged as his extramarital partner.

According to Bloomberg, the U.S. Justice Department is investigating whether entities linked to Alice Huang were involved in efforts to smuggle Super Micro products into China, with the scrutiny being led by the US attorney’s office in Manhattan. The DOJ is already investigating Alice Huang’s former company, Megaspeed International, over suspected semiconductor smuggling, and Megaspeed has denied wrongdoing. 

Semafor said nothing indicates for now that the DOJ plans criminal charges against Nvidia or Jensen Huang.

Nvidia Turmoil, Chip Selloff Keep Pressure on Supermicro

Huang stepped down Thursday as Nvidia’s president and CEO and from its board, effective immediately. CFO Colette Kress will serve as interim CEO while the board searches for a permanent replacement, and Harvey C. Jones becomes the company’s first independent chairman. 

Nvidia shares were down 2% in early trading Friday, extending a slide that has pushed the stock down 13% this week. The company reports earnings Tuesday with no permanent CEO in place. Other chipmakers are also lower, with Advanced Micro Devices Inc. (NASDAQ:AMD) and Broadcom Inc. (NASDAQ:AVGO) among the decliners. 

The broader market is under pressure too. The Nasdaq was down 1.72% and the S&P 500 was off 1.10% in morning trading as wholesale inflation rose.

Supermicro builds servers that depend on Nvidia chips, so leadership upheaval at Nvidia and federal attention on Supermicro itself may heighten regulatory and reputational risks for shareholders.

SMCI Shares Extend Two-Day Decline

SMCI Price Action: Super Micro shares are down 2.67% at $26.27 at the time of publication on Friday, according to Benzinga Pro.

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