Could Super Micro Computer's Troubles Sink Nvidia's Stock?

By David Jagielski, CPA – Mar 30, 2026 at 2:00PM ESTKey PointsNvidia's growth has been impressive, given that it has largely excluded a key market in China.A recent scandal involving Super Micro, however, suggests the billions worth of chips evaded export restrictions.Nvidia's stock has been struggling this year amid broader softness in the tech sector.The U.S. government has charged multiple people connected with Super Micro Computer (SMCI 4.10%) with smuggling Nvidia (NVDA 1.24%)'s advanced chips to China, including Wally Liaw, a co-founder of Super Micro. Given the close relationship between the two companies, it's not surprising that Nvidia's stock has been falling amid these concerning developments. While there's no reason to believe the tech company is involved in any wrongdoing, it would suggest that at least some of its growth can be attributed to the Chinese market -- something that investors have largely assumed hasn't been the case. Here's why this can be a big problem for the tech giant. Image source: Getty Images.

Why Super Micro's troubles could weigh on Nvidia Investors have been bullish on Nvidia's stock due to the expectation that there is much more growth to come from the business in the future. And one market that has been largely off-limits of late but that has been seen as a potentially lucrative growth opportunity for Nvidia is China. Last year, CEO Jensen Huang estimated that the overall artificial intelligence (AI) market in China could reach $50 billion within the coming years. For Nvidia, China has represented a huge growth opportunity, and that has enabled investors to remain fairly bullish about its long-term prospects, given that it's doing so well without a huge market to tap into just yet. But if people connected with Super Micro have truly been diverting billions of dollars' worth of chips to China, then Nvidia's growth would effectively factor in a piece of the Chinese market, even if the alleged figure is relatively modest at around $2.5 billion. The bigger risk, however, may be that the U.S. government puts in more restrictive measures on the Chinese market in light of this scandal. Earlier this year, it had allowed the sale of certain chips to China. ExpandNASDAQ: NVDANvidiaToday's Change(-1.24%) $-2.08Current Price$165.44Key Data PointsMarket Cap$4.1TDay's Range$165.43 - $169.4552wk Range$86.62 - $212.19Volume5MAvg Vol177MGross Margin71.07%Dividend Yield0.02% Is Nvidia's stock destined to go lower this year? Shares of Nvidia are down 10% this year, but they are still nowhere near their 52-week lows of less than $87. Investors have grown concerned about high-valued tech stocks of late, and Nvidia is proving to be no exception. At a price-to-earnings multiple of 34, its valuation has come down a bit (it has traded at well over 50 times earnings within the past year), but it's still not showing any signs of rallying just yet. And news of a smuggling scandal involving may only give investors more of a reason to remain bearish. As a long-term investment, however, Nvidia's stock may be worth adding to your portfolio. While there is some short-term risk here, the opportunities in AI remain massive, and Nvidia's chips are likely to remain in high demand for the foreseeable future. The stock might still dip lower as the year goes on, but I also wouldn't be surprised if it bounces back.Read NextMar 30, 2026 •By Rachel Warren5 Best eVTOL Stocks to Buy in 2026Mar 30, 2026 •By Jack CaporalThe AI Stocks Hedge Funds Love the MostMar 30, 2026 •By Bram BerkowitzNvidia Stock Just Did Something for the First Time in a Decade. Is This the Buying Opportunity of a Lifetime?Mar 30, 2026 •By Daniel Miller3 Lucrative Stocks to Buy Now and Hold ForeverMar 30, 2026 •By John Ballard3 Artificial Intelligence (AI) Stocks That Could Help Set You Up for LifeMar 29, 2026 •By Stefon WaltersNvidia vs. Palantir: Which Stock Will Make You Richer?About the AuthorDavid Jagielski, CPA, has been a contributing Motley Fool stock market analyst covering healthcare, consumer staples, consumer discretionary, and technology stocks since 2017. David has more than 10 years of experience in finance roles across businesses of different sizes and sectors. He holds a Certified Public Accountant designation in Canada.TMFdjagielskiStocks MentionedNvidiaNASDAQ: NVDA$165.61(-1.14%)-$1.91Super Micro ComputerNASDAQ: SMCI$21.09(-4.00%)-$0.88*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.