SMCI shares jump after Taiwan seizes 50 AI servers

Super Micro Computer Inc. said it aided Taiwanese authorities in arresting three people and seizing 50 AI servers that had been deceptively acquired and routed to China’s restricted market. The stock rose on the disclosure.

In a company press release, Super Micro said the seized systems had been sold through an authorized reseller. The sale, the release said, followed a vetting process that exceeded applicable government requirements and involved downstream third-party actors.

The announcement follows a March federal indictment that named three individuals with ties to the company, including a board member and a Taiwan-based sales manager, accused of conspiring to route Nvidia-powered AI servers to China without required U.S. export licenses. That indictment prompted a sharp drop in the company’s share price and led to multiple securities class action lawsuits.

Super Micro reported its most recent quarter included $10.2 billion in sales, a sequential gross margin increase of 360 basis points to 9.9% and adjusted earnings per share of $0.84, a 171% gain from the prior year. Management provided guidance of about $39 million in sales for the full year.

Investors have pushed SMCI shares higher in recent months; including the latest gains the stock has more than doubled in just over two months. The shares are trading at roughly 17 times forward earnings. Analyst coverage carries a consensus rating of “hold,” with some price targets as high as $50.

The company has made recent executive hires, naming Matthew Thauberger as chief revenue officer and Vik Malyala as chief business officer.

Regulatory and legal risks remain. The export-control investigation tied to the March indictment has not been resolved, and several securities class action suits are pending. Super Micro faces competition in the AI infrastructure market from larger incumbents and original design manufacturers, and its gross margins remain lower than some peers.