MW Super Micro's stock rises, but an analyst warns that 'flattish' growth lies ahead after co-founder's indictment

By Christine Ji

An analyst just downgraded Super Micro's stock on concerns that the export-control scandal involving the server company's co-founder will weigh on customer trust

Northland Capital Markets analyst Nehal Chokshi says it's "concerning" that Super Micro didn't cut ties with co-founder Wally Liaw after his indictment last week.

Shares of Super Micro Computer were up 5% midday Monday, clawing back some of the losses incurred last week after co-founder Wally Liaw was indicted for alleged export-control violations.

And while the company, which wasn't named in the indictment, has taken several steps to distance itself from the scandal, one analyst just wrote that risks remain. Northland Capital Markets' Nehal Chokshi downgraded Super Micro's stock $(SMCI)$ to market perform on Monday, while cutting his price target to $22 from $63.

Chokshi noted that this is the second time that Liaw's alleged actions have sparked investigations, referencing an audit inquiry from 2017. This could drive "an erosion of trust between [Super Micro], suppliers and current and prospective clients" and "minimally lead to an extended period of flattish revenue and earnings growth," Chokshi predicted.

Analysts had been expecting Super Micro's sales to roughly double from a year before in both the June and September quarters.

Read: Super Micro's stock sinks 33% after co-founder's indictment. Here are Wall Street's biggest questions.

Federal prosecutors allege that Liaw was involved in a smuggling operation that diverted $2.5 billion of Nvidia (NVDA) chips to China. According to the indictment, Liaw and two others set up "dummy" servers in a Southeast Asian company's storage facilities to fool officials, while repackaging servers to be shipped to China.

Super Micro directed MarketWatch to a previously published statement on the matter, in which it said that it "maintains a robust compliance program and is committed to full adherence to all applicable U.S. export and re-export control laws and regulations." MarketWatch was unable to quickly contact Liaw.

Liaw resigned from the company's board on Friday, but notably remains on administrative leave from his position as vice president of business development. "We find the lack of definitive action to immediately sever ties with Wally Liaw ... as concerning," Chokshi wrote.

He pointed out that Liaw resigned from the company in 2018 following the accounting-related scandal. But after the investigation found no clear evidence of wrongdoing, he was rehired in 2021.

Super Micro also appointed DeAnna Luna to the role of chief compliance officer, effectively splitting the compliance and CFO roles, according to Chokshi. While he said that seems like a "positive" development, he also called the appointment "reactionary rather than proactive" - highlighting that the change had been a lingering recommendation ever since a special committee was formed following the resignation of Super Micro's auditor Ernst & Young in late 2024.

Don't miss: Jensen Huang once said there was 'no evidence' Nvidia chips were getting diverted to China. The scandal at Super Micro suggests otherwise.

-Christine Ji

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March 23, 2026 13:36 ET (17:36 GMT)

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