Oil whipsawed between $119 and a 2% loss yesterday as Netanyahu hinted the Iran conflict could wrap up faster than expected. Gold cratered 6% in a stunning single-day reversal. And $5.7 trillion in options expire today in what Citi says is the largest March triple-witching on record.

That's a lot of noise. But the story that's going to dominate conversations today isn't any of those things.

A co-founder of one of the hottest AI stocks of the last two years was arrested yesterday for smuggling $2.5 billion worth of Nvidia-powered servers to China using hair dryers. The stock is down 27% before the opening bell.

We dig into the buy-or-bail question below. But first: we're running a short survey today and we'd genuinely love your input. It takes five minutes and helps us make this newsletter better for you!

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It's fitting that this story breaks on triple-witching Friday.

Super Micro Computer (SMCI), once the poster child of the AI server boom, is down 27% pre-market after federal prosecutors unsealed a criminal indictment charging co-founder Yih-Shyan "Wally" Liaw with orchestrating a $2.5 billion scheme to smuggle high-end AI servers to China in violation of US export controls.

Prosecutors allege Liaw used a "pass-through" entity in Southeast Asia to ship servers loaded with restricted Nvidia GPUs to Chinese buyers. To cover their tracks, the group used hair dryers to peel serial numbers and labels off real machines, replaced them with dummy units for internal audits, and shipped the actual hardware overseas in unmarked boxes. The DOJ estimates this operation ran at least $2.5 billion in illegal sales since 2024, making the shell entity one of SMCI's largest "customers" during that stretch.

Liaw has been placed on administrative leave along with other involved employees. The company's contractor relationship has been terminated. Crucially, Super Micro itself has not been charged and says it is cooperating fully with the DOJ.

This isn't SMCI's first rodeo with fraud allegations. The company was delisted in 2018 over accounting issues and narrowly avoided another delisting in late 2024 following a Hindenburg Research short report. Today's drop brings the stock's total decline from its 2024 peak to over 80%.

The SMCI crash has split Wall Street into two camps, and both have a case.

The "get out now" side: SMCI's entire business model depends on its status as a top Nvidia partner. If the US government pressures Nvidia to revoke SMCI's license to sell restricted chips (a real possibility given the national security dimension here) the company loses its core product. Add in potential government contract bans and the near-certainty of heavy fines, and who knows where the downside stops.

The "buy the dip" side: At ~$22 per share, SMCI is trading at a forward P/E of roughly 9x-10x, down from 50x at its peak. The company is still projected to hit $40 billion in revenue by FY2026, and it's a world leader in Direct Liquid Cooling servers, which are in skyrocketing demand for AI data centers. The argument here is something like “SMCI's infrastructure is too embedded in the global AI supply chain to be allowed to fail.”

The central question isn’t really about the valuation; the numbers are objectively cheap. It's about whether Nvidia needs Super Micro more than the US government wants to make an example of them. If you believe SMCI is too integrated into AI infrastructure to be seriously punished, this is a blood-in-the-streets entry point. If you believe the government is prepared to treat a $2.5 billion national security violation as exactly that, then single digits are not out of the question.

For conservative investors, the risk profile here is too unpredictable to justify a position. For high-risk traders, this is the kind of asymmetric moment that can make or break a year… in either direction.

This is not financial advice. Always do your own research.

Markets pared back steep losses Thursday after crude futures cooled from their morning spike.

Oil bounced between panic and relief, surging as much as 10% early Thursday to $119 per barrel after Iran and Israel traded strikes on critical energy infrastructure. By afternoon, Brent had reversed course and tumbled 2% as Netanyahu pledged to help reopen the Strait of Hormuz. The wild swings kept traders on edge as the war entered its third week.

President Trump's $200 billion Iran war funding request sparked immediate pushback on Capitol Hill. The figure, double earlier estimates and exceeding all US spending on Ukraine since 2022, drew skepticism even from Republicans. Defense Secretary Pete Hegseth defended it by saying "it takes money to kill bad guys," while President Trump called it "a small price to pay" to keep America "tippy top."

Gold crashed 6% Thursday in a stunning reversal for the traditional safe haven. The precious metal plunged to $4,600 per ounce while silver collapsed 13% as rising yields and a strengthening dollar made non-yielding assets less attractive. Bitcoin dropped below $70,000 in sympathy, proving "digital gold" isn't immune to macro headwinds either.

Gary Cohn warned that sustained high gas prices are "absolutely recessionary." President Trump's former chief economic adviser told Yahoo Finance that consumers watching pump prices climb from $60 to $85 per fillup are losing disposable income in real time, the difference between taking the family out to dinner or staying home. He pegged the current environment as stagflationary: no growth, but prices increasing.

Wall Street braces for a massive options expiration today. Roughly $5.7 trillion in notional options across stocks, indexes, and ETFs expire in the quarterly "triple-witching", the largest March expiry in Citi data going back to 1996. The event arrives at a particularly volatile moment, with the VIX well above its six-month average and positioning-driven flows likely to amplify swings.

Bonds tumbled globally as the Iran war sparked rate hike bets and fresh inflation fears. The selloff pushed long-dated yields higher, adding pressure to equity valuations already strained by geopolitical uncertainty.

The answer: Monster Beverage!

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Cheers,
Brandon & Blake of Invested Inc