2 AI Stocks Partnered With Nvidia to Sell Before They Fall 66% and 69%, According to Wall Street Analysts

Year to date, Super Micro Computer (NASDAQ: SMCI) shares have added 57%, and Intel (NASDAQ: INTC) shares have advanced 90%. Excitement about artificial intelligence (AI) has been the main source of upside, especially because both companies work with Nvidia in some capacity. But these analysts expect the stocks to fall sharply in the next year:

• Mehdi Hosseini at Susquehanna recommends selling Supermicro. His target of $15 per share implies 69% downside from its current share price of $48.
• Kevin Cassidy at Rosenblatt Securities recommends selling Intel. His target of $14 per share implies 66% downside from its current share price of $41.

Here's what investors should know about these artificial intelligence stocks.

Image source: Getty Images.

Super Micro Computer: 69% implied downside

Supermicro designs and manufacturers storage systems, compute subsystems, and servers, including liquid cooling and rack-scale solutions, for artificial intelligence (AI). Supermicro was quick to establish a leadership position in AI servers, partly because its modular approach to product development lets it quickly build a wide range of servers when partners like Nvidia release new chips.

However, Mehdi Hosseini at Susquehanna says Supermicro lacks a competitive moat. It simply buys hardware from innovative companies like Nvidia and assemblers the parts into data center systems.

Other analysts have also voiced concerns about competition. Dell Technologies recently became a supplier for CoreWeave and xAI, two companies that have historically been Supermicro clients.

Supermicro reported disappointing financial results in the fourth quarter of fiscal 2025, which ended in June. Revenue increased 7% to $5.8 billion, gross margin dropped 70 basis points, and non-GAAP (generally accepted accounting principles) net income fell 24%. That margins have narrowed in the last several quarters is concerning because it implies Supermicro is losing pricing power, which itself supports the argument that the company lacks a competitive advantage.

Wall Street expects Supermicro's adjusted earnings to grow at 22% annually over the next two years. That makes the current valuation of 29 times earnings look reasonable. But analysts have overestimated in the past. Supermicro missed the consensus estimate by an average of 15% during the last five quarters.

I doubt shares will tumble 69%, but investors should look for AI stocks with stronger competitive advantages.

Intel: 66% implied downside

Intel reported encouraging third-quarter financial results, including a significant beat on the bottom line. Revenue rose 3% to $13.7 billion, and non-GAAP earnings were $0.23 per diluted share, up from a loss of $0.46 per diluted share last year. Management also said its partnership with Nvidia could help the company gain a foothold in the artificial intelligence race.

Intel remains the leader in central processing units (CPUs) for data center servers and personal computers, but execution missteps have cost the company a substantial amount of market share. Most concerning, Intel accounted for only 63% of server CPU shipments in the second quarter, meaning its market share has dropped 20 percentage points in the last four years as the AI boom has steered more business toward AMD and Arm.

Apart from the Nvidia partnership -- Nvidia invested $5 billion in Intel, and the companies will work together to develop custom data center products -- Intel shareholders recently got more good news. The company started making chips on its 18A process, albeit a little later than initially planned. The timing matters, because the 18A node will compete with Taiwan Semiconductor's N2 node, slated for production later this year.

Intel's foundry business -- a core piece of the turnaround strategy outlined by former CEO Pat Gelsinger in 2021 -- has yet to win a single major customer. This could mean Intel may have to cancel the development of its next-generation 14A node and exit the market for advanced CPUs. But a strong 18A production ramp could inspire enough confidence that companies choose to contract with Intel for foundry services.

Wall Street expects Intel's sales to grow at 2% annually over the next two years. In that context, the current price-to-sales ratio of 3.1 actually looks expensive.

I doubt shares will decline 66%, but I think investors should avoid the stock. Intel has consistently made poor decisions -- most notably, it passed on supplying Apple with iPhone chips in 2006, and passed on supplying OpenAI with data center hardware in 2017 -- and the company has so far failed to benefit from AI.

Trevor Jennewine has positions in Nvidia. The Motley Fool has positions in and recommends Advanced Micro Devices, Apple, Intel, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool recommends the following options: short November 2025 $21 puts on Intel. The Motley Fool has a disclosure policy.