Super Micro Computer is tumbling amid a smuggling investigation into a member of its board of directors that could benefit one major AI server competitor, according to Wall Street Shares of Super Micro are heading for their worst one-day drop since 2024 on reports that its cofounder, a manager and a contractor were charged with smuggling Nvidia chips to China by the U.S. Attorney's Office for the Southern District of New York. The company itself was not named as a defendant. SMCI was last down more than 25%, while chipmaker Nvidia's shares retreated about 1%. However, analysts say Super Micro's setback is an opportunity for Dell Technologies , another system builder in the AI ecosystem, whose shares jumped 4.5% Friday. "What is bad for SMCI is good for DELL, just in terms of market share shifts," the Wells Fargo trading desk said in a note Friday morning. As a prime alternative for similar AI servers, Dell is the most likely to scoop up business from Super Micro, said Wedbush analyst Matt Bryson. DELL YTD mountain Dell, YTD "If SMCI operations are disrupted, we would suspect DELL might be the most immediate beneficiary as Dell has emerged as the other significant supplier of AI servers/equipment to large non hyperscale AI customers (neoclouds, sovereign entities, model builders)." The smuggling case is the latest in a series of mishaps for Super Micro, including management turnover and an accounting debacle from less than two years ago. And it could be Dell's "biggest windfall yet," according to Melius Research's Ben Reitzes. "Yet another dark cloud looms over Supermicro with this China headline and should help Dell disproportionately in selling these solutions," he said. "Of the U.S. resellers of AI servers, Dell had the best relationship with Nvidia before this headline – now it will just get better." Jefferies also highlighted Dell's strength Friday on the back of the smuggling story and Mizuho's Jordan Klein said Dell "would be a net winner if share shifted." Other equipment manufacturers seeking to grow their AI business could benefit from the smuggling case as well, Bryson said, highlighting Cisco and Hewlett Packard Enterprise . He also noted that design manufacturers like Pegatron , who may want to expand their customer base, could be beneficiaries. —CNBC's Michael Bloom contributed reporting.
