Super Micro Computer Inc (NASDAQ: SMCI) remains in focus today after Coatue Management founder Philipe Laffont revealed he’s pulled out of AI server company.
In its place, the hedge fund manager has made a substantial investment in a legacy tech company with deep roots in enterprise software and cloud infrastructure.
While Supermicro shares successfully avoided a delisting threat in 2025 – they have not been particularly exciting for investors in recent months.
At the time of writing, the AI stock is down roughly 30% versus its July high.
Why Laffont unloaded SMCI stock
Super Micro Computer has been riding the AI wave, but not without turbulence.
In mid-2024, the company faced allegations from Hindenburg Research, which raised concerns about its accounting practices and executive rehiring decisions. Although Supermicro ultimately filed its annual report without restating financials, the damage to investor confidence lingered.
Add to that weaker-than-expected earnings and guidance in August – partly due to tariff-related constraints and shifting customer specs – and the SMCI stock narrative became more complicated.
More importantly, the artificial intelligence server giant renewed concerns of inadequate internal financial controls last week, adding its remedial measures may fail to fully address the problem or avoid future inaccuracies.
Laffont, known for his tactical exits, may have seen enough red flags to justify locking in gains. While SMCI still trades at a modest valuation, its near-term outlook remains clouded by macro and regulatory risks.
Why Laffont loaded up on Oracle stock
Instead of chasing the flashiest AI names, Laffont turned to Oracle Inc (NYSE: ORCL), a company that’s been quietly reinventing itself for the artificial intelligence era.
Coatue acquired over 3.8 million shares in the second quarter, a stake worth north of $843 million. Oracle’s cloud infrastructure business is booming, with management forecasting 70% growth in fiscal 2026 after a strong 52% expansion the prior year.
CEO Larry Ellison emphasized Oracle’s unique position: “Our applications take all of your application data and make that data available to the most popular AI models.”
With its massive database footprint and enterprise relationships, Oracle stock is becoming a go-to platform for companies integrating AI into their operations.
Laffont’s bet reflects confidence in Oracle’s ability to scale AI solutions without the hype.
Should you invest in ORCL shares today
Oracle stock isn’t cheap – trading at roughly 34 times forward earnings – but its fundamentals are strengthening.
That’s why Wall Street currently rates ORCL shares at “overweight” with price targets going as high as $325, indicating potential upside of another 45% from current levels.
Additionally, Oracle stock does also pay a small dividend yield of 0.88% at the time of writing, which makes it even more attractive as a long-term holding.
While it may not deliver explosive returns like early-stage AI plays, Oracle’s blend of scale, profitability, and strategic positioning could make it a cornerstone in any tech-focused portfolio.
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