Why Oracle Stock Just Dropped
Oracle stock dropped 6% after reports that the company canceled an order for 300-400 server racks from Super Micro Computer, potentially due to concerns over illicit sales of Nvidia chips to China or Oracle feeling overextended in AI. The canceled order could cost Super Micro $1.05 billion to $1.4 billion in lost sales.
Oracle stock sank 6% after news broke that the company may be having a falling-out with key server supplier Super Micro Computer. Oracle allegedly canceled an order for 300-400 Super Micro GB300 NVL72 server racks loaded with Nvidia chips. The cost of each rack is estimated at $3.5 million, potentially costing Super Micro $1.05 billion to $1.4 billion in lost sales, although the company had already shipped 100-200 racks. Oracle may have 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. Alternatively, Oracle may be feeling overextended in AI and wants to reduce its risk if costs keep rising and revenue doesn't grow fast enough.
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