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Investing.com -- Goldman Sachs analyst Katherine Murphy has assumed coverage ofSuper Micro Computerwith a Sell rating, citing ongoing margin pressure and limited visibility on profitability despite strong AI-server growth.
The bank set a 12-month target price of $26 per share, down from $34.
Murphy expects SMCI to remain “a leader in the AI server market in the medium term,” particularly in tier-2 cloud and neocloud segments, where the company had “27% share in C3Q25.”
The firm noted that SMCI is well-positioned for major AI buildouts, supported by “differentiated product engineering and focus on time to market.”
However, the analyst warned that profitability remains the key concern. Murphy sees “limited visibility into improving profitability as SMCI continues to participate in large margin dilutive deals,” adding that margins have “halved in the last three years to 9.5%” in the most recent quarter.
The bank feels SMCI’s position between powerful suppliers and concentrated customers leaves it “in a price-taking position,” with one supplier making up 64% of purchases.
The bank also questioned SMCI’s strategy to expand through its Data Center Building Blocks platform, noting that software is “<2% of revenue” and the company has just 705 sales employees, compared with Dell’s “50,000+.”
Goldman Sachs’s EPS forecasts for SMCI are 10% below consensus and that “there could still be further downside to margins,” even as revenue exceeds expectations.
The firm said its $26 target implies roughly 15% downside from current levels.
