Investors in Super Micro Computer (NASDAQ:SMCI) have been selling the news. And selling and selling.
Even before the company had successfully satisfied doubters by meeting its late February filing deadline to remain listed on the Nasdaq, the company’s share price had been falling. The slide has continued over the past few months, as fears of tariffs, reduced AI capex spending, and a potential global slowdown entered the picture.
The share price has lost some 50% of its value after reaching a recent high point towards the end of February. And yet, SMCI is fully entrenched in the lucrative AI race, and has provided bullish guidance of $40 billion in sales for FY 2026, which would represent a significant year-over-year increase.
While acknowledging reasons for optimism, investor Bohdan Kucheriavyi believes that the risks are too high.
“Despite various growth opportunities, Super Micro still faces major risks,” notes the 5-star investor. “Given the changing macro environment, I believe that it’s better to avoid investing in Super Micro for now.”
Looking at the industry, Kucheriavyi mentions that Microsoft has recently been cancelling some of its data center spending. If this is an indication of larger pullbacks in AI investments, it could lead to decreases in SMCI’s revenues and margins, warns the investor.
Zooming out, a looming trade war could plunge markets into disarray and put plenty of pressure on demand for SMCI’s products, notes Kucheriavyi. And that’s not the only geopolitical flashpoint, as rising tensions between China and Taiwan could further impact the global supply of semiconductors.
In addition, Kucheriavyi explains that SMCI might not fully address the problems that led to the delisting risks, meaning that the company could once again face compliance issues. SMCI was previously delisted a few years back, reminds the investor.
All that being said, Kucheriavyi believes that SMCI is on the cusp of a solid year of growth. Though the investor asserts that the company share price is severely undervalued, the wide circle of risks are preventing him from offering a more bullish take.
“As the macro environment is worsening and (a) recession could be on the horizon, I believe that it’s better to avoid investing in Super Micro for now,” concludes Kucheriavyi, who gives SMCI a Hold (i.e. Neutral) rating. (To watch Bohdan Kucheriavyi’s track record, click here)
That just about sums up the views on Wall Street as well. With 4 Buy, 4 Hold, and 2 Sell ratings, SMCI holds a consensus Hold rating. Its 12-month average price target of $49.00 has an upside north of 50%. (See SMCI stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.