Nvidia Stock (NVDA) at Risk of Decline if Key Client Gets Delisted

Nvidia stock (NASDAQ: NVDA) is among the top performers in 2024, trailing only AI-related stock Vistra Corp (NASDAQ: VST). The company has delivered impressive returns, driven by growing demand for AI technologies across key industries. With its market capitalization now approaching about 12% of the U.S. GDP, Nvidia has solidified its position as a dominant player in the tech sector.

At press time, NVDA shares are trading at $136.84 — after shedding 3.08% on the weekly chart on account of broadly disappointing earnings and guidance from the tech sector. On a year-to-date (YTD) basis, the stock is up 184.10%.

Naturally, concerns about valuations have started to surface. Beyond the broader anxieties about a potential AI bubble, there is a more specific factor that could hinder Nvidia’s momentum.

On November 20, the chipmaker is set to release its Q4 2024 earnings report — and by then, one of its largest customers could be delisted and under investigation by the Department of Justice (DOJ). This potential development could significantly impact Nvidia’s performance and stock price.

SMCI Stock Crash Explained

Super Micro Computer Inc. (NASDAQ: SMCI) was one of the standout performers of 2024 until recently. From the start of the year through August 27, SMCI had surged by an impressive 89.61%.

However, the stock's momentum came to a sudden halt when Hindenburg Research, a well-known short-selling activist firm, published a damaging report alleging widespread accounting fraud. The report also revealed that Hindenburg had taken a short position on SMCI stock.

The very next day, Super Micro announced that it would delay the filing of its annual 10-K report with the Securities and Exchange Commission (SEC). This news triggered a sharp 30% drop in SMCI's share price, as investors reacted to the potential implications for the company’s financial health.

In the aftermath of this revelation, Super Micro Computer stock traded in a range from $40 to $45, occasionally reaching as high as $47. On October 30, it became public that six days prior, the venture’s auditor, Ernst & Young (EY) had resigned. What followed was another 30% decrease in share price.

Interestingly enough, one savvy trader appears to have potentially had insider knowledge that this would happen — having placed an options trade that netted him roughly 3,000% returns.

At press time, on November 1, SMCI shares are trading at $26.88 — having lost 5.92% in value on the daily chart — finally turning the company’s year-to-date (YTD) returns negative at 5.80%.

How Super Micro Computer’s Potential Delisting Could Impact Nvidia Stock
While Nvidia (NVDA) does not disclose the names of its largest customers in the Q-10 filings it submits to the SEC, it does report the percentage of its revenue generated by these clients.

The filing reveals a concerning concentration of revenue, with 46% of Nvidia’s total earnings tied to just four customers. If one of these key customers, such as Super Micro Computer (SMCI), were to face delisting or financial difficulties, it could have a significant impact on Nvidia’s revenue and, by extension, its stock performance.


The fallout from Super Micro Computer’s (SMCI) troubles is likely to impact Nvidia’s stock price following its earnings report, as a key revenue source may experience reduced demand or even halt orders entirely.

This development also comes at a time when many investors remain skeptical about the sustainability of increased AI spending, questioning whether the industry's long-term potential justifies short-term profit sacrifices. The prospect of one of Nvidia’s largest customers potentially being involved in fraud could further erode investor confidence. It may even act as the tipping point for AI-weary investors, triggering a broader selloff in Nvidia stock.

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Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.