{"id":2694,"date":"2026-03-20T16:42:52","date_gmt":"2026-03-20T16:42:52","guid":{"rendered":"https:\/\/retrotradingreport.com\/index.php\/2026\/03\/20\/one-simple-reason-to-avoid-buying-the-dip-in-smci-stock-today\/"},"modified":"2026-03-20T16:42:52","modified_gmt":"2026-03-20T16:42:52","slug":"one-simple-reason-to-avoid-buying-the-dip-in-smci-stock-today","status":"publish","type":"post","link":"https:\/\/retrotradingreport.com\/index.php\/2026\/03\/20\/one-simple-reason-to-avoid-buying-the-dip-in-smci-stock-today\/","title":{"rendered":"One simple reason to ‘avoid’ buying the dip in SMCI stock today"},"content":{"rendered":"
<\/div>\n

Super Micro Computer (NASDAQ: SMCI) crashed this morning after federal prosecutors unsealed a bombshell indictment charging a company co-founder and high-ranking employees with a massive scheme to smuggle advanced AI technology to China.<\/p>\n

SMCI stock tanked more than 25% in early trading as investors learned that Yih-Shyan \u201cWally\u201d Liaw \u2013 a co-founder \u2013 and board member allegedly participated in a backdoor operation to divert $2.5 billion worth of restricted Nvidia-powered servers to Chinese entities.<\/p>\n

This legal nightmare follows a string of accounting probes and the high-profile resignation of the company’s auditor, Ernst & Young, late last year. <\/p>\n

Versus its February high, Supermicro shares<\/a> are down some 35% at the time of writing.<\/p>\n

Why SMCI stock pullback isn\u2019t a buying opportunity<\/h2>\n

While the server maker claims it was not a named defendant in the case, the market is voting with its feet, fearing that Nvidia may now be forced to cut off its supply of Blackwell chips to protect its own regulatory standing.<\/p>\n

Even if it doesn\u2019t, however, one simple reason to avoid buying this dip in SMCI shares is the fact that this company continues to fall into one controversy after another.<\/p>\n

For seasoned investors, this isn\u2019t just bad luck; it\u2019s a systemic red flag. <\/p>\n

Wall Street can forgive a bad quarter, but it rarely forgives a persistent lack of internal controls.<\/p>\n

The fact that a co-founder \u2013 who had already resigned once following a 2018 accounting scandal, only to be rehired in 2022 \u2013 is at the center of a federal smuggling investigation suggests a culture of non-compliance.<\/p>\n

When a company repeatedly finds itself in the crosshairs of the DOJ or the SEC, the risk of \u201cterminal value\u201d destruction becomes real.<\/p>\n

In this case, the controversy threatens the very lifeblood of the business: its partnership with chip giant Nvidia.<\/p>\n

Why bottom fish when Nvidia itself is on sale<\/h2>\n

Value hunters might argue that SMCI stock looks \u201ccheap\u201d at roughly 17x forward earnings, but that argument loses its teeth when you look at the rest of the sector.<\/p>\n

Currently, Nvidia itself is trading at a significantly compressed valuation compared to its historical highs, often hovering near similar forward multiples when adjusted for its massive growth rate.<\/p>\n

As Alger\u2019s Ankur Crawford recently noted in a CNBC interview<\/a>, when the market gives you a chance to buy the undisputed king of AI \u2013 Nvidia \u2013 at a reasonable price, there is no logical reason to \u201cbottom fish\u201d in other names.<\/p>\n

Nvidia offers pure-play exposure to the AI revolution without the \u201cbaggage\u201d of federal indictments or missing financial audits that remain an overhang on Supermicro stock.<\/p>\n

Supermicro shares may just be a value trap<\/h2>\n

All in all, it\u2019s just not about how fast Super Micro Computer can build a liquid-cooled rack or how much revenue it might generate in 2027.<\/p>\n

It\u2019s simply the fact that in a market filled with reliable, high-growth alternatives like Dell or Nvidia, which are also trading at bargains, there\u2019s no reason to take on \u201ccontroversy risk.\u201d<\/p>\n

In investing, your capital is your most precious resource, and tying it up in a company that requires a legal team to explain its quarterly earnings is a recipe for underperformance.<\/p>\n

When the dip is caused by a fundamental breakdown in corporate integrity, as in the case of SMCI stock, it\u2019s not an opportunity to buy; it\u2019s often a warning sign to stay away.<\/p>\n

The post One simple reason to 'avoid' buying the dip in SMCI stock today<\/a> appeared first on Invezz<\/a><\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Super Micro Computer (NASDAQ: SMCI) crashed this morning after federal prosecutors unsealed a bombshell indictment charging a company co-founder and high-ranking employees with a massive scheme to smuggle advanced AI technology to China.SMCI stock tanked more than 25% in early trading as investors learned that Yih-Shyan \u201cWally\u201d Liaw \u2013 a co-founder \u2013 and board member…<\/p>\n","protected":false},"author":1,"featured_media":2695,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-2694","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing"],"_links":{"self":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/posts\/2694","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/comments?post=2694"}],"version-history":[{"count":0,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/posts\/2694\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/media\/2695"}],"wp:attachment":[{"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/media?parent=2694"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/categories?post=2694"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/retrotradingreport.com\/index.php\/wp-json\/wp\/v2\/tags?post=2694"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}