Report of DOJ Probe Expanding to Nvidia Pressures Super Micro Shares
Key Facts
A headline published by Investing.com on November 12, citing Semafor, said the U.S. Department of Justice investigation related to Super Micro had expanded to include Nvidia. Super Micro shares closed at $30.43 in the November 11 session, while Nvidia shares ended the session at $173.73, according to EL7 data. The reported expansion of the investigation to Nvidia remains attributed to Semafor, as no official confirmation of the specific claim was available from the department or either company. The report comes amid broader scrutiny of AI server trading and export-control compliance, alongside financing and regulatory concerns affecting the sector. Super Micro’s disclosures and quarterly results provide context for the pressure, with strong sales and earnings growth but a decline in margin from the previous quarter.
On November 12, shares of companies linked to AI fell amid a leadership crisis at Nvidia and financing and regulatory concerns, according to Reuters. The news agency said allegations about CEO Jensen Huang’s personal relationships threatened to unsettle the chipmaker’s leadership. It also pointed to scrutiny of Nvidia’s financing of infrastructure built around its chips, a strategy that has raised questions about circular financing. Regulatory concerns linked to the expansion of AI infrastructure also came to the fore. These developments relate to the November 12 session and do not retrospectively explain the stocks’ closing prices the previous day.
Nvidia shares fell 7.8% in premarket trading on November 12 amid reports that the board was considering ousting Huang, according to Reuters. In the same session, AMD shares rose 1.7% and Broadcom shares rose 0.8%. The news agency attributed the moves in the two stocks to investors’ expectation that turmoil at Nvidia could give its rivals an opportunity in the AI chip market. It said short sellers in Nvidia had made paper profits of about $3.8 billion through the previous session’s close. Those profits could rise to about $6.8 billion if the stock fell to $163, according to an estimate reported by the agency.
Super Micro’s net sales totaled $19.9 billion in the first quarter of its fiscal 2027, compared with $11.1 billion in the fourth quarter of fiscal 2026 and $5.0 billion in the first quarter of fiscal 2026. Net income was $1.594 billion, compared with $168 million in the same period of the prior fiscal year. But gross margin under U.S. accounting standards was 12.7%, down from 17.5% in the previous quarter, although up from 9.3% a year earlier. CEO Charles Liang said the company’s transformation into an AI data center and IT solutions provider “continues to accelerate,” pointing to record revenue of $19.9 billion. The results therefore combine revenue and earnings expansion with a margin contraction from the previous quarter.
The background to the export scrutiny dates to a separate case announced by the Department of Justice on March 19, 2026, when it disclosed charges against three people accused of conspiring to divert U.S. servers equipped with AI technology to China in alleged violation of export laws. The department said a front company bought about $2.5 billion in servers between 2024 and 2025, and that at least about $510 million worth of servers made by the manufacturer were diverted to China between late April and mid-May 2025. These are allegations in a case involving individuals and server diversion; they do not in themselves establish that an investigation expanded to Nvidia. Super Micro said in its statement that it was not a defendant in that case and was cooperating fully with the government’s investigation. Reuters also reported in April 2026 that the company had begun an independent investigation and an internal review of its global trade compliance program.
In its first-quarter fiscal 2027 disclosure, Super Micro said it received a subpoena from the U.S. Securities and Exchange Commission on November 19, 2024, another from the SEC on April 28, 2026, and a Department of Justice grand jury subpoena following the indictment issued on March 19, 2026. The company added that it was cooperating and responding to the requests, and had not been told that it was a target of the export-control inquiries it described. The disclosure places earlier requests from U.S. authorities in the context of the company’s regulatory matters, but provides no official confirmation of the published claim about Nvidia. The company expects net sales of between $19.5 billion and $21.5 billion in the second quarter of fiscal 2027, which ends on December 31, 2026. This remains the announced sales guidance range for the coming period.