Super Micro Computer (SMCI) Plunges 7.7% to 2025 Low on Goldman Sachs Downgrade, Margin Risks

The share price fell to its lowest level since April 2025 today, with an intraday decline of 7.70%.

Super Micro Computer (SMCI) has seen a sharp selloff amid a “sell” rating from Goldman Sachs, which cited margin compression and profitability risks despite strong AI demand. Analyst Katherine Murphy highlighted the firm’s unprofitable contracts with secondary cloud clients and rising costs as key concerns, setting a $26 price target—well below consensus.

Other analysts, including Wedbush, have also cut price targets, signaling broader skepticism about SMCI’s ability to stabilize margins. However, a $20 million order for NVIDIA B300 GPU systems in early January underscores ongoing demand for the company’s AI infrastructure, offering a rare near-term positive catalyst.

SMCI’s institutional ownership of 84.06% amplifies its volatility, as mixed investor sentiment and downgrades have accelerated selling. While bullish analysts argue the stock remains a key AI play, bearish calls emphasize execution risks, including weak cash flow and lack of clear guidance on margin recovery. With macroeconomic and sector-wide uncertainties persisting, SMCI’s path to stabilization will depend on addressing profitability challenges and demonstrating improved supply chain efficiency. Until then, the stock remains vulnerable to further declines amid divergent analyst expectations and institutional positioning shifts.