Super Micro Computer (NASDAQ:SMCI) is facing a class-action lawsuit. The server maker is accused of misleading investors about exposure to China and compliance risks tied to the sale of export-controlled Nvidia Corp. (NASDAQ:NVDA) chips.
Investors Allege Hidden China Sales And Compliance Failures
On Wednesday, shareholders claimed SMCI overstated its growth prospects by failing to disclose that a significant portion of its server sales were linked to China, potentially in violation of U.S. export controls, Reuters reported.
The lawsuit, filed in federal court in San Francisco, alleges the company had material weaknesses in its compliance systems while presenting a stronger business outlook to investors.
Criminal Charges Trigger Stock Collapse
The legal action follows criminal charges against co-founder Yih-Shyan Liaw and two others, accused of orchestrating sales of servers containing Nvidia chips to China through a Southeast Asian intermediary.
Super Micro’s stock plunged 33% on March 20 after the charges were disclosed, wiping out roughly $6.1 billion in market value. Liaw has since resigned from the board.
Prosecutors alleged the scheme involved about $2.5 billion worth of servers sold in 2024 and 2025.
Company Responds As Lawsuit Seeks Damages
Super Micro has previously said it is cooperating with authorities. The company and Nvidia have not been criminally charged and Nvidia is not named in the civil suit.
The lawsuit also names CEO Charles Liang and CFO David Weigand.
Super Micro did not immediately respond to Benzinga’s request for comments.
Price Action: SMCI closed at $24.05 on Wednesday, up 8.19% and slipped 0.42% to $23.95 in after-hours trading, according to Benzinga Pro.
Benzinga Edge Stock Rankings indicate the stock remains in a negative trend across short, medium and long-term periods. However, its Quality ranks in the 97th percentile.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo: JHVEPhoto / Shutterstock
Recent Comments