April 25 - Super Micro Computer (SMCI, Financial) traded lower Friday after two major Wall Street firms flagged limited upside for the AI server provider, citing increased market competition and macroeconomic uncertainty.
Citi (C, Financial) initiated coverage on the stock with a Neutral rating and a $39 price target, saying Super Micro holds an 8% global share in the AI server space. The firm acknowledged the company's exposure to AI infrastructure growth through enterprise and GPU-as-a-Service customers but warned of pressure on margins as rivals scale up.
The new rating followed JPMorgan's (JPM, Financial) move last week, when analyst Samik Chatterjee maintained a Neutral stance and trimmed his target from $45 to $39. JPMorgan said macro headwinds, including a weaker global economy and trade-related uncertainty, may limit customer spending across enterprise, telecom, and consumer segments.
Both banks see long-term potential for Super Micro amid strong AI demand, but believe near-term challenges could curb gains.
Shares of Super Micro were recently down about 1%, retreating for a second session. The stock remains up more than 150% year-to-date but has pulled back from its March highs.
