Super Micro stock fell 13% last week As U.S. Investigates Nvidia AI Sales

Data from S&P Global Market Intelligence shows that the stock of Super Micro (SMCI, Financial) saw a sharp fall last week, dropping 13% below the previous week’s close. It came as investors shifted their stance after the latest Federal Reserve meeting. The Fed’s expected 25 basis point interest rate cut was carried out, though Chairman Jerome Powell’s talk of less dovish future rate cuts shook market confidence. These are sell-offs in growth-dependent stocks like Supermicro because the central bank now projects just two rate cuts in 2025, down from an expected four.

The downturn in Supermicro’s stock was also driven by worries about the company’s vulnerability to a U.S. government probe. According to a report in The Information, the U.S. Department of Commerce is investigating how Nvidia’s advanced AI processors could have ended up in China in violation of export bans. Dell and Supermicro were also named as companies that could have been selling servers linked to transactions. The probe is in the early stages, but the growing scrutiny shatters another layer of uncertainty over Supermicro’s prospects.

Supermicro’s delay in filing its 10-K, due by February 25, also is an important event. However, a clean report could help boost investor confidence. At the same time, restatements or changes to financial results that are significant enough to generate negative headlines for the stock could compound the pressures. The company’s next steps will be key to shaping its market trajectory from here.

This article first appeared on GuruFocus.