Super Micro Computer (SMCI) remains under pressure after an independent research firm, BlueFin Research, reported that the company may have lost a major AI infrastructure deal with Oracle (ORCL). The stock fell as investors reacted to the potential revenue hit.
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Trade NVDA with leverageReport Points to Major Contract Loss
According to the report, Oracle has scrapped plans to purchase between 300 and 400 AI racks from Super Micro. Each rack, powered by Nvidia (NVDA) chips, is estimated to cost around $3.5 million, putting the total value of the canceled deal between $1.1 billion and $1.4 billion.
Market sources believe Oracle may be shifting this business to competitors like Wiwynn, Dell Technologies (DELL), and Hewlett Packard Enterprise (HPE), which are seeing increased interest as some customers pull back from Super Micro amid regulatory concerns.
Oracle shares were also down in Thursday’s early trading as investors weighed the disruption to its own cloud expansion.
Legal Issues Add to Pressure
The reported cancellation comes amid legal concerns surrounding Super Micro’s co-founder Yih-Shyan “Wally” Liaw. U.S. authorities have accused him of involvement in a scheme to move restricted Nvidia chips to China.
While Liaw pleaded not guilty in a New York courtroom earlier this month, the situation appears to be affecting confidence among enterprise customers.
Beyond the Oracle loss, BlueFin raised red flags regarding Super Micro’s excess inventory of older GPU stock, which is becoming harder to sell.
Is SMCI Stock a Hold or Sell Right Now?
On TipRanks, SMCI stock has a Hold consensus rating based on three Buys, eight Holds, and two Sell ratings. The average Super Micro Computer price target of $30.53 implies 11.60% upside potential from current levels. Over the past year, SMCI shares have fallen 11.3%.
