Super Micro Computer Inc. (NASDAQ:SMCI) shares are falling on Wednesday afternoon. The Nasdaq is up 0.17% while the S&P 500 has shed 0.28%.

• Super Micro Computer shares are retreating from recent levels. What’s behind SMCI decline?

Oracle Cancels Massive Server Order

According to Bluefin Research on Thursday, Oracle Corp. (NYSE:ORCL) reportedly canceled an order for 300 to 400 NVIDIA Corp. (NASDAQ:NVDA) GB300 NVL72 racks.

Each rack costs $3.5 million. This represents a contract loss between $1.1 billion and $1.4 billion. Bluefin estimates SMCI shipped only 100 to 200 racks before the termination.

Legal Headwinds Drive Business Shift

Bluefin indicates the cancellation stems from serious legal challenges. Bluefin research sources cite the indictment of an SMCI co-founder for smuggling AI GPUs into China. Reportedly, Wiwynn secured the redirected rack business following this fallout.

Short Interest Remains Elevated

Current data shows 18.31% of the float remains short. While short interest recently decreased to 83.19 million shares, bearish pressure persists.

SMCI recently tried to pivot by expanding its portfolio with ARM Holdings PLC (NASDAQ:ARM) based servers.

Technical Analysis

The stock is trading 0.2% above its 20-day simple moving average (SMA), which hints at near-term stabilization, but it's also trading 12.2% below its 100-day SMA.

The moving average structure is still a headwind: the 20-day SMA is below the 50-day SMA, and the death cross that formed in December keeps the longer-term trend pressure in focus.

On a longer lens, the stock is down 27.65% over the past 12 months.

It's also well below the 52-week high of $62.36 and closer to the $19.48 low.

  • Key Resistance: $30 — Level where rallies have recently struggled to push through.
  • Key Support: $19.50 — Near the 52-week low area where demand previously showed up.

SMCI Stock Price Activity: Super Micro Computer shares were down 4.02% at $26.16 on Wednesday, according to Benzinga Pro data.

Image via Shutterstock