Super Micro falls 12% as server-smuggling probes widen and chip outlook strengthens
Key Facts
Super Micro shares fell about 12% in Thursday’s session, November 12, after a report said the U.S. Justice Department was investigating whether entities linked to Alice Huang had attempted to smuggle Super Micro products into China. Investing.com, citing Bloomberg, reported that the latest investigation is being led by the U.S. attorney’s office in Manhattan. It was unclear whether the probe was connected to existing semiconductor-smuggling cases. The decline came as signals across the sector diverged between investigative pressure and strong expectations for demand for chipmaking equipment. In the same session, major U.S. indexes fell, while AMD shares rose.
The report said the investigation was examining whether entities linked to Alice Huang had used the company’s products in attempted shipments to China, but did not say whether the case was connected to other investigations. The Justice Department was separately investigating Megaspeed International, Huang’s former company, on suspicion of semiconductor smuggling. Megaspeed denied wrongdoing, according to the report. In March, federal prosecutors in Manhattan charged Super Micro co-founder Yih-Shyan “Wally” Liaw and two others with an alleged conspiracy to ship servers equipped with Nvidia chips to a company in Southeast Asia and then divert them to Chinese buyers. Super Micro was not named as a defendant in that case and said it was cooperating with the investigation.
On the demand side, Applied Materials forecast first-quarter fiscal 2027 revenue of about $11.10 billion, plus or minus $500 million. That was above the average analyst estimate of $10.89 billion. The company attributed the outlook to strong demand for advanced AI chips, which is supporting spending on semiconductor manufacturing equipment. Semiconductor Systems revenue was $8 billion in the fourth quarter of 2026, up about 64% year over year. By contrast, the company’s shares ended the November 12 session down 3.58% at $380.95 before the results announcement, then rose 0.5% in extended trading to $382.85.
Applied Materials’ chief financial officer linked the expansion in demand to cloud data center investment, saying cloud capital spending “is expected to rise more than 50% in 2027 to a level well above $1 trillion.” The outlook puts spending on AI infrastructure at the center of demand for chipmaking equipment. The company’s quarterly results show the scale of growth it described in the sector, with Semiconductor Systems revenue reaching $8 billion. The company forecast quarterly revenue above the average analyst estimate, with a wide range around its baseline forecast. Indicators of demand growth thus coincided with volatility in technology stocks during Thursday’s session.
In broader markets, the S&P 500, Dow Jones and Nasdaq indexes each fell 0.4% in Thursday’s session, November 12. In contrast to the indexes, AMD shares rose 5.9% during the session. In Asia on Friday morning, November 13, Taiwan’s Taiex index gained 1.4%, and TSMC shares rose 0.4%. South Korea’s Kospi fell 1%, while SK Hynix shares declined 3%. Moves in the two Asian markets were mixed as investors reacted to news on chip demand and the risks posed by the investigations.
Sysco closed at $76.24 on November 12, compared with $76.94 in the previous session and $77.63 on November 10. The company reported on November 3 that first-quarter sales in fiscal 2027 rose 2.8%, while U.S. Foodservice domestic case volume increased 2.7% from the same period a year earlier. It maintained its forecast for adjusted earnings per share growth of between 9% and 11% in fiscal 2027, assuming domestic case volume growth of about 2.5%. But it expected annual sales growth to come in at the lower end of its 6% to 7% range. Management attributed the outlook to a lower-inflation environment in the sector and included expected savings of $100 million from its AI-powered cost-reduction program in its fiscal-year guidance.
Sysco issued its initial fiscal 2027 guidance on August 4, setting sales growth at 6% to 7% and adjusted earnings per share growth at 9% to 11%. In its November update, the company kept its adjusted earnings per share growth range unchanged while expecting sales growth at the lower end of its range. The guidance assumed domestic case volume growth of about 2.5% and expected cost savings of $100 million. In Thursday’s session, the closing price fell to $76.24 from $76.94 the previous day. The company’s shares closed at $77.63 on November 10, according to EL7 data.