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Goldman Sachs analyst Michael Ng sees further downside in Super Micro (SMCI) shares even though they have already tanked over 18% over the past month.
Ng cited intense competition and valuation concerns as he downgraded SMCI stock to “Sell” and trimmed his price target on the AI server company to $32 in a research note on Monday.
His downwardly revised target warns of another 23% decline in shares of Super Micro Computer from current levels.
Goldman Sachs’ call arrives only a month after SMCI filed its pending financial reports to regain compliance with the Nasdaq’s minimum listing requirements.
Why Is Goldman Sachs Bearish on Supermicro?
Supermicro’s rivals have been investing rather aggressively in research and development (R&D) to build products that are less differentiated from SMCI’s.
This will lead to pressure on the company’s market share moving forward, according to Michael Ng.
Amidst rising competition from OEMs as well as ODMs, Supermicro could fail to deliver on its promise of $40 billion in revenue in fiscal 2026, the Goldman Sachs analyst told clients in a note today.
Up more than 50% versus its year-to-date low, Super Micro Computer stock is currently going for about 16 times its estimated earnings for 2025 that Ng dubbed an “unfavorable” risk-reward in his report.
SMCI Could Struggle With Gross Margin Contraction
Michal Ng expects continued investments aimed at introducing new features to weigh on SMCI’s gross margins. He sees the metric contracting to 12.2% this year and further to 11.7% in 2026.
On Monday, he lowered his EPS estimates for Super Micro Computer as well, adding investors are better off selling the AI stock into the strength since it may fall further in the coming months.
Goldman Sachs’ earnings estimate for Supermicro now sit well below the consensus for 2025 as well as for each of the next two years.
Other Analysts Disagree with Ng on SMCI Stock
Investors should note that Goldman Sachs has a bit of a contrarian view on Supermicro stock.
While the firm turned bearish on SMCI shares this morning, the consensus rating on Super Micro Computer remains at “Moderate Buy” with the mean target of about $58 indicating potential upside of roughly 40% from current levels.
