What Happened?
Shares of server solutions provider Super Micro (NASDAQ: SMCI) fell 6.8% in the afternoon session after reports surfaced that the company lost a significant contract with Oracle, valued at between $1.1 billion and $1.4 billion. According to research from Bluefin, Oracle canceled an order for 300 to 400 Nvidia GB300 NVL72 server racks.
The cancellation is reportedly linked to a U.S. Justice Department indictment against Super Micro's co-founder for an alleged scheme to smuggle restricted AI GPUs into China. This development adds to a growing legal and regulatory cloud over the company, which already faces multiple class-action lawsuits concerning alleged export-control violations. Compounding these issues are reports of slowing business with another customer, xAI, and a considerable excess of B200 GPU inventory at Super Micro.
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What Is The Market Telling Us
Super Micro’s shares are extremely volatile and have had 47 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 9 days ago when the stock gained 5.9% on the news that the company launched a new family of compact, energy-efficient edge AI systems powered by AMD EPYC 4005 series processors.
The systems were designed to accelerate AI workloads in settings with limited space and power, such as retail, manufacturing, and healthcare. The stock's climb was also supported by a broader market rally. Reports indicated that traders were focusing on the strong demand for the company's AI infrastructure and its product plans rather than recent legal issues. The new product launch added to an existing bull case for the company, which included a significant backlog for its products.
Super Micro is down 12.4% since the beginning of the year, and at $27.11 per share, it is trading 55.3% below its 52-week high of $60.71 from July 2025. Despite the year-to-date decline, investors who bought $1,000 worth of Super Micro’s shares 5 years ago would now be looking at an investment worth $7,088.
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