April 25 - Super Micro Computer (NASDAQ:SMCI) 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 (NYSE:C) 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 (NYSE:JPM) 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.
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