Super Micro Computer Inc (NASDAQ:SMCI) shares are trading flat Wednesday morning, stabilizing following Tuesday’s move lower. The price action comes as broader markets are experiencing pressure, with the S&P 500 down 0.70% and the Nasdaq-100 sliding 1.32%, indicating a challenging environment for technology stocks today. Here’s what investors need to know.
Analysts Are Turning Bearish On Super Micro
The decline in Super Micro Computer’s shares follows negative analyst coverage from Goldman Sachs, which initiated coverage with a Sell rating and set a price target of $26. This comes after Mizuho also downgraded its rating from Neutral to a lower price target of $31, reflecting growing concerns about the stock’s performance.
While praising its AI infrastructure positioning, engineering and speed, Goldman warned profitability is the key risk amid margin-dilutive deals, competition and costs.
The stock has been under pressure for some time, with shares down 8.75% over the past 12 months. Currently trading around $28.40, this positions the stock significantly below its 52-week high of $66.44, indicating a challenging year for investors.
Assessing Key Support Levels
Super Micro Computer is trading 7.1% below its 20-day simple moving average (SMA) and 31.4% below its 100-day SMA, suggesting a bearish trend in the short to medium term. Shares have decreased 8.75% over the past year and are currently positioned closer to their 52-week lows than highs.
The RSI is at 31.94, which is considered neutral territory, while the MACD is above its signal line, indicating bullish momentum. The combination of neutral RSI and bullish MACD suggests mixed momentum, which could indicate a potential reversal if market conditions improve.
- Key Resistance: $32.00
- Key Support: $27.50
Super Micro’s Earnings: A Crucial Turning Point?
Investors are looking ahead to the next earnings report on Feb. 10.
- EPS Estimate: 45 cents (Down from 51 cents YoY)
- Revenue Estimate: $10.38 billion (Up from $5.68 billion YoY)
- Valuation: P/E of 22.5x (Indicates fair valuation)
Analyst Consensus & Recent Actions: The stock carries a Hold Rating with an average price target of $43.56. Recent analyst moves include:
- Goldman Sachs: Sell (Target $26.00)
- Mizuho: Neutral (Lowered Target to $31.00)
- BofA Securities: Sell (Target $34.00)
Valuation Insight: While the stock trades at a fair P/E multiple, the consensus and 12% expected earnings decline suggest analysts view this growth as justification for the 53% upside to analyst targets.
Benzinga Edge Rankings
Below is the Benzinga Edge scorecard for Super Micro Computer, highlighting its strengths and weaknesses compared to the broader market:
- Momentum: Weak (Score: 6.51/100) — Stock is underperforming the broader market.
- Quality: Strong (Score: 95.91/100) — Balance sheet remains healthy.
- Value: Strong (Score: 79.19/100) — Trading at a fair valuation relative to peers.
- Growth: Strong (Score: 92.88/100) — Indicates potential for future expansion.
The Verdict: Super Micro Computer’s Benzinga Edge signal reveals a mixed outlook. While the strong Quality and Growth scores indicate potential, the weak Momentum score warns that the stock is currently struggling to gain traction.
Super Micro Shares In Focus
SMCI Price Action: Super Micro Computer shares were down 0.03% at $28.59 at the time of publication on Wednesday, according to Benzinga Pro data.
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