Why Oracle Stock Just Dropped
Key Points
Bluefin Research reports Oracle just canceled a $1 billion-plus order for Super Micro servers.
Super Micro is embroiled in allegations its co-founder illegally shipped AI servers to China.
- 10 stocks we like better than Oracle ›
Oracle (NYSE: ORCL) stock sank 6% through 10:05 a.m. after news broke this morning of a falling-out the company may be having with key server supplier Super Micro Computer (NASDAQ: SMCI).
According to technology-focused equity research house Bluefin Research, Oracle has just canceled an order for 300 to 400 Super Micro GB300 NVL72 server racks loaded with Nvidia (NASDAQ: NVDA) chips.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: Getty Images.
What this means for Super Micro
Bluefin estimates the cost of each rack at $3.5 million, so a loss of 300 to 400 racks could cost Super Micro anywhere from $1.05 billion to $1.4 billion in lost sales. It's not a total loss for Super Micro, however, because Bluefin says the company shipped somewhere between 100 and 200 racks before Oracle canceled its order.
That said, Bluefin argues Super Micro is also losing sales to xAI ahead of the SpaceX IPO. (And SpaceX now owns xAI.) So things are not going well for Super Micro.
What does this mean for Oracle stock?
Pundits think that Oracle canceled the contract to distance itself from accusations that Super Micro co-founder Yih-Shyan "Wally" Liaw was involved in illicit sales of Nvidia chips to China -- and that may be true.
But another possible explanation for Oracle canceling orders for artificial intelligence servers is that... Oracle is feeling overextended in AI and wants to reduce its risk if costs keep rising and revenue stubbornly refuses to grow fast enough to support all its spending.
That's the big worry surrounding Oracle today. AI revolutions are great and all, and a lot of investors have made a lot of money from this one. But this turns into a game of musical chairs, and the music suddenly stops, Oracle won't be sitting pretty.
Should you buy stock in Oracle right now?
Before you buy stock in Oracle, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Oracle wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $502,837!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,241,433!*
Now, it’s worth noting Stock Advisor’s total average return is 977% — a market-crushing outperformance compared to 200% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of April 23, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia and Oracle. The Motley Fool has a disclosure policy.
Recommended Articles
