Investor scrutiny around Super Micro Computer, Inc. (NASDAQ:SMCI) is intensifying as Wall Street weighs the company’s strong positioning in AI servers against mounting concerns over margins, competition, and long-term profitability.
Goldman Sachs Initiates Coverage With Sell Rating
Goldman Sachs analyst Katherine Murphy assumed coverage of Super Micro on Tuesday, assigning a Sell rating and a price forecast of $26 per share. Goldman acknowledged that Super Micro is well-positioned for large AI infrastructure buildouts, supported by differentiated engineering and a strong focus on speed to market.
Despite that favorable industry positioning, Goldman flagged profitability as the key risk. Murphy cited “limited visibility into improving profitability” as Super Micro continues to pursue large, margin-dilutive deals amid intensifying competition from both original equipment manufacturers and original design manufacturers, alongside pressure from rising input costs. The leading AI server maker’s stock has declined more than 8% over the past 12 months.
AI Data Center Expansion Remains Core Growth Driver
Despite the bearish call, Super Micro continues to invest aggressively in advanced AI infrastructure. The company is expanding U.S.-based manufacturing and advanced liquid-cooling capabilities to support next-generation AI data centers built on Nvidia Corp.’s (NASDAQ:NVDA) Vera Rubin platforms.
Working closely with Nvidia, Super Micro aims to position itself as an early supplier of rack-scale systems designed for large-scale AI training and inference workloads. Its modular data center architecture enables faster customization and deployment for hyperscalers and enterprise customers, accelerating AI capacity investments.
Governance And Margin Pressures Weigh On Sentiment
Super Micro’s stock has come under pressure as revenue growth has slowed and margins have compressed. The company has also faced heightened scrutiny over internal control weaknesses and governance lapses, including a missed filing deadline that resulted in its auditor’s resignation.
While management has launched remediation efforts, it has cautioned that risks remain as it works to restore investor confidence alongside its AI-driven growth strategy.
SMCI Price Action: Super Micro Computer shares were down 5.68% at $28.41 at the time of publication on Tuesday, according to Benzinga Pro data.
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