Manhattan Probe Into Alice Huang Weighs on Super Micro Shares, Down 12%
Key Facts
Super Micro shares fell 12% in Thursday’s November 12, 2026 session after Reuters reported that the company could face a U.S. Justice Department investigation, alongside a Bloomberg report of an investigation into the possible role of entities linked to Alice Huang in smuggling the company’s products to China. Bloomberg said the U.S. Attorney’s Office in Manhattan is leading the investigation. The report weighed on the stock as AI shares broadly declined. The investigation is focused, according to the report, on the role of entities linked to Huang in the smuggling effort. It was unclear whether the new investigation is connected to earlier chip-smuggling cases.
Bloomberg’s report did not specify whether the investigation is connected to chip-smuggling cases that appeared in earlier filings. In March 2026, U.S. prosecutors accused a Super Micro co-founder and two people linked to the company of helping smuggle U.S. AI technology to China, valued at no less than $2.5 billion, Reuters reported, citing the Justice Department. The complaint did not name the company as a defendant. In August 2026, Super Micro said it had completed an independent internal investigation into the March allegations. It added that it found no evidence that any current senior management member knew of the alleged scheme or that the company diverted controlled products.
Super Micro said the three individuals covered by the case were no longer associated with it and that it continued to cooperate with government authorities in their ongoing investigations. In the Singapore case, the Ministry of Home Affairs said police had requested information about the company in its capacity as a U.S. server supplier, in connection with their local investigations. The ministry added that police and prosecutors had asked U.S. authorities to secure the company’s cooperation after raising the matter at a meeting held on July 7, 2025. But it said Super Micro had provided limited cooperation. Singaporean authorities concluded in February 2026 that there was insufficient evidence to establish that Alice Huang had committed the possible declaration offenses under investigation. They nevertheless issued her a stern warning and barred her from returning, after assessing that she had knowingly provided inaccurate information.
Singapore’s Ministry of Home Affairs said the investigation into Megaspeed and six other people remained ongoing, and that none of the six had been in Singapore since the investigation began in February 2025. In Taiwan, six people were questioned in June 2026 over suspected document forgery and breach of trust, and searches covered 12 locations, Reuters reported. Super Micro said two of its four employees who were questioned had been detained pending a hearing, while the other two were released on bail. In announcing its internal investigation, the company said it had reviewed the customer transactions covered by the federal indictment. It said it found no evidence that any current senior management member knew of the alleged scheme or that the company diverted controlled products.
The U.S. investigation report came as the company announced results for the first quarter of fiscal 2027, with net sales of $19.9 billion. Sales rose from $11.1 billion in the fourth quarter of fiscal 2026 and from $5.0 billion in the first quarter of fiscal 2026. But gross margin was 12.7%, compared with 17.5% in the previous quarter, though above 9.3% in the same period of the prior fiscal year. The company posted net income of $1.594 billion and diluted earnings per share of $1.75. In comments reported by Reuters, Chief Financial Officer Mark Long said the company “embeds compliance in its culture and expands resources to ensure strong internal controls.”
The financial disclosure showed the company used $434.0 million of cash in operating activities during the three months ended September 30, 2026, compared with $917.5 million in the same period of 2025. Cash and cash equivalents totaled $6.897 billion at the end of September, while accounts receivable reached $9.685 billion. Accounts receivable were concentrated among a limited number of customers; two customers accounted for 49.0% and 16.8% of the balance as of September 30, 2026. Three customers represented 23.0%, 17.1% and 12.5% of accounts receivable as of June 30, 2026. The company also said disclosure controls were not effective at a reasonable assurance level as of September 30, 2026, due to an unremediated material weakness in internal control over financial reporting involving information technology controls and user access reviews.
Super Micro expects second-quarter fiscal 2027 sales of between $19.5 billion and $21.5 billion, with the quarter ending on December 31, 2026. The company also raised its fiscal 2027 revenue outlook to between $72.0 billion and $82.0 billion, compared with a previous range of between $65.0 billion and $72.0 billion, Reuters reported. The annual outlook puts demand for AI servers at the center of the company’s view of its future business. This comes as the U.S. investigation into entities linked to Huang continues, with no clarity on its connection to earlier chip-smuggling cases. The company said in August that it continued to cooperate with authorities in the ongoing investigations.