Wall Street Breakfast Podcast: SMCI Hit By Export Scandal

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Nasdaq, S&P, Dow futures rise as Netanyahu eases concerns about the Iran conflict. (00:15) Super Micro (SMCI) falls as co-founder, employee charged in Nvidia chip smuggling case. (00:48)Unilever (UL) in talks to sell its food business to McCormick (MKC). (03:00)

This is an abridged transcript.

Stock index futures are firmly in the green.

S&P 500 futures (SPX) rose 0.90%, Nasdaq 100 futures (US100:IND) gained 1.02%, and Dow Jones Industrial Average futures (INDU) advanced 0.97%.

Bitcoin is up 1% at $70,000. Gold is up 0.5% at $4,677.

Market sentiment improved after Israeli Prime Minister Netanyahu said the country is helping to reopen the Strait of Hormuz.

Oil prices slipped on the news that Netanyahu said Iran no longer has the capacity to enrich uranium or make ballistic missiles.

Crude oil is down 0.2% at $95. Brent crude is at $109.

European indexes also rebound after an ease in oil prices.

The FTSE 100 is up 0.2% and the DAX is up 0.6%.

In Asia, the markets in Japan (NKY:IND) closed for a holiday.

Super Micro Computer (SMCI) is down 22% in premarket action.

Three individuals linked to the AI server maker, including a co-founder, were charged with violating export laws by assisting in the smuggling of at least $2.5 billion worth of U.S. AI technology to China.

The Justice Department did not name Super ‌Micro in the complaint, referring only to a “U.S. manufacturer.”

The company said it was informed by federal prosecutors of the indictment on Thursday. It noted that it was not named as a defendant in the case and said it had cooperated with investigators.

In an indictment unsealed on Thursday, the U.S. government alleged that Yih-Shyan “Wally” Liaw, Ruei-Tsan “Steven” Chang and Ting-Wei “Willy” Sun worked together to violate the Export Control Reform Act. Liaw co-founded Super ​Micro in 1993, and joined its board of directors in 2023. Chang was a sales manager in the Taiwan office of Super Micro, while Sun was ⁠a contractor.

U.S. officials allege the trio went to great lengths to hide their actions from both U.S.-based server manufacturers and export control authorities, even using hair dryers to remove labels and serial numbers ​from the real machines and placing them on dummy machines left behind after the real machines had been shipped to China.

The efforts have yielded around $2.5 billion in sales for the server maker since 2024, with $510 million sold between late April 2025 and mid-May 2025 going to the Southeast Asian company and on to China, the indictment said. The plaintiff said the server maker had no U.S. Commerce Department license to export servers featuring Nvidia (NVDA) GPUs to China.

Super Micro Computer (SMCI) said it placed its co-founder and the sales manager on leave and terminated its ties with the contractor, after being made aware of the charges on Thursday.

The attorney’s office said the co-founder and contractor were both arrested on Thursday, while the sales manager is a fugitive.

Unilever (UL) announced that it received an inbound offer for its food business and is in discussions with McCormick (MKC).

The Wall Street Journal reported, citing people familiar with the matter, that an all-stock deal may be announced within weeks if talks don’t fall apart. The exact structure remains unknown.

Unilever’s (UL) food business, which houses brands such as Knorr and Hellmann’s, could be worth tens of billions of dollars. McCormick’s (MKC) products include Frank’s RedHot sauce and French’s yellow mustard.

Separating its food business would enable Unilever (UL) to focus on its beauty, personal care and home divisions. The company spun off its ice cream business Magnum last year.

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The biggest movers for the day premarket: FedEx (FDX) +11% – Stock gained in premarket trading after the company topped expectations with its fiscal third-quarter earnings report.

Here’s a link to the Investment News Quiz for the week.