Super Micro Computer (NASDAQ: SMCI) stock is losing ground in Tuesday’s trading. The company’s share price was down 5.9% as of 3:15 p.m. ET and had been down as much as 9.9% earlier in the day’s trading.
Supermicro is falling on the heels of recent coverage on the stock from J.P. Morgan. While J.P. Morgan’s analysts said that orders for Supermicro’s servers continued to be robust despite recent controversies surrounding the company, it maintained an underweight rating on the stock and a one-year price target of $23 per share.
Are You Missing The Morning Scoop? Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
J.P. Morgan’s analysts recently met with Supermicro’s management and came away with some encouraging conclusions. The analysts believe that Supermicro has seen no significant loss of orders to competitors despite some reports suggesting that this was occurring. The company said that it was planning to release new products in 2025 and that production at its Malaysia plant is on track to begin scaling up in the first half of next year.
Supermicro said that it had sufficient working capital to deliver production needed to generate quarterly revenue between $5.5 billion and $6 billion, and it expects to see tailwinds in conjunction with the ramp-up of Nvidia‘s next-generation Blackwell processors for artificial intelligence (AI). But despite some promising indicators and catalysts on the horizon, J.P. Morgan’s one-year price target of $23 per share implies downside of roughly 45% compared to the stock’s current level.
J.P. Morgan’s bearish outlook on Supermicro stock highlights recent challenges facing the company. Despite the company’s near-term performance outlook appearing solid, recent controversies have caused the server specialist’s share price to be highly volatile — and some investors are concerned that unfolding developments could spur another wave of big sell-offs.
After Ernst & Young resigned as Supermicro’s financial auditor in October, the tech company brought on BDO as its replacement. Having an…
..
