Goldman Sachs Slashes Super Micro Computer Price Target Amid Margin Concerns
Super Micro Computer (SMCI) shares tumbled 6.8% to $28.06 after Goldman Sachs maintained its Sell rating and cut the price target from $34 to $26. The AI server manufacturer now faces shrinking margins, with gross margin projected at just 7.5% by 2026—a stark decline from 15% in 2022.
The stock has plummeted over 75% from its March 2024 peak of $118.81, becoming the second-worst performer in the S&P 500. Analysts remain deeply divided, with price targets ranging from $26 to $63, reflecting uncertainty about SMCI's ability to maintain profitability in the competitive AI hardware sector.
Goldman's bearish outlook highlights a critical challenge: AI server margins now languish in single digits, roughly half of traditional server margins. This compression comes despite Super Micro's technological leadership, underscoring the brutal economics of AI infrastructure.
