Super Micro Computer faces patent litigation and import ban threat

Super Micro Computer is facing a combination of strong financial performance and significant legal challenges. The chip developer Netlist has filed a complaint with the US International Trade Commission (ITC) against Super Micro Computer, as well as Micron, HPE, and Lenovo. The dispute concerns four patents related to DDR5 memory modules, specifically RDIMM and MRDIMM technologies. Netlist is seeking an import ban on the affected products, a process that typically takes 12 to 18 months.

Despite the legal pressure, the company reported robust fiscal fourth-quarter results, with earnings per share of $1.62 or $1.70, significantly exceeding analyst expectations. While quarterly revenue of $11.12 billion was slightly below market estimates due to infrastructure delays, management provided an aggressive revenue forecast for fiscal year 2027, projecting between $65 billion and $72 billion.

In the financial markets, hedge funds have been increasing short positions on Super Micro Computer and other AI infrastructure firms like CoreWeave and Nebius. This increased short interest comes despite the company's recent strong earnings, creating potential risks for short-sellers.