Key Takeaways
- Super Micro Computer shares declined approximately 10% during Thursday’s trading session, continuing recent market turbulence.
- Research firm BlueFin reported Oracle terminated plans to acquire 300–400 AI server racks from Super Micro, valued at $1.1–$1.4 billion.
- Federal prosecutors indicted company co-founder Wally Liaw for allegedly smuggling controlled Nvidia processors to China.
- Class action litigation claims a $2.5 billion operation redirected restricted GPU servers to Chinese customers.
- Second quarter fiscal 2026 revenue reached $12.68 billion, surpassing projections by 23%, while yearly guidance increased to $40 billion.
Shares of Super Micro Computer experienced significant pressure during Thursday’s session. The stock declined approximately 10% during morning hours, falling from its previous closing price of $29.18 to a session low of $26.07. This decline followed a month-long rally that had pushed shares up 35%, creating vulnerability to negative developments.
Super Micro Computer, Inc., SMCI
That vulnerability materialized quickly.
BlueFin Research, an independent market analysis firm, disclosed that Oracle has withdrawn from an agreement to acquire between 300 and 400 AI server racks from Super Micro. Each rack, built around Nvidia processors, carries an approximate value of $3.5 million. Total estimated value of the canceled transaction ranges from $1.1 billion to $1.4 billion.
Industry observers indicate Oracle plans to shift this procurement to competing suppliers such as Wiwynn, Dell Technologies, and Hewlett Packard Enterprise. Oracle’s shares also declined during early trading hours as market participants assessed potential delays to its cloud infrastructure buildout.
Legal Challenges Intensify
The lost contract arrives alongside mounting legal difficulties. Federal authorities have indicted co-founder Yih-Shyan “Wally” Liaw on charges related to allegedly orchestrating the export of controlled Nvidia processors to China. Liaw pleaded not guilty during a court appearance in New York earlier this month.
Multiple law firms have initiated class action proceedings against the company. Both Levi & Korsinsky and Faruqi & Faruqi reference allegations of a $2.5 billion operation that illegally channeled restricted Nvidia GPU servers to entities based in China. The class period extends from April 30, 2024 through March 19, 2026, with May 26 designated as the deadline for lead plaintiff motions.
An earlier Department of Justice indictment involving three individuals connected to the company previously triggered a 33% stock decline.
JPMorgan analysts have reduced their price target on SMCI from $40 to $28 while maintaining a neutral stance.
BlueFin’s research also highlighted inventory buildup of legacy GPU models facing softening demand. This inventory concern compounds existing legal uncertainties.
Revenue Strength Contrasts With Margin Compression
Financial performance showed mixed signals. Super Micro’s second quarter fiscal 2026 results, released February 3, demonstrated robust top-line growth. Revenue totaled $12.68 billion, substantially above the $10.34 billion consensus estimate, representing 123% year-over-year expansion.
Non-GAAP earnings per share reached $0.69 compared to analyst expectations of $0.49 — exceeding forecasts by 41%. Company leadership increased full-year fiscal 2026 revenue guidance to a minimum of $40 billion, up from prior guidance of $36 billion. CEO Charles Liang highlighted over $13 billion in Blackwell Ultra orders.
However, GAAP gross margin contracted to 6%, down from 12% in the comparable year-ago period. This divergence between revenue acceleration and margin deterioration continues to draw analyst scrutiny.
Wall Street sentiment remains divided: 5 Buy ratings, 9 Hold ratings, and 4 Sell ratings, with a median price target of $33.20.
The company’s third quarter fiscal 2026 earnings report is anticipated around May 5.
