Super Micro Computer (SMCI) has received a new Hold rating, initiated by Citi analyst, Asiya Merchant.
Asiya Merchant has given his Hold rating due to a combination of factors impacting Super Micro Computer’s stock. The company is well-positioned in the AI server market, benefiting from the growing demand for AI-driven infrastructure. However, the competitive landscape is becoming increasingly challenging, which is putting pressure on the company’s margins.
Despite the positive momentum in AI server demand, Super Micro Computer faces significant competition, notably from companies like DELL. This competition, along with high customer concentration and concerns about free cash flow generation, tempers the optimistic outlook. Additionally, macroeconomic factors such as tariff uncertainties and past issues with internal controls contribute to the cautious Hold rating.
In another report released on April 17, J.P. Morgan also maintained a Hold rating on the stock with a $39.00 price target.