New York, Jan 13, 2026, 20:42 ET — Market closed.
- Shares of Super Micro Computer dropped 5% Tuesday, ending the day at $28.60
- Goldman Sachs initiated coverage with a Sell rating, lowering its price target to $26
- Investors are focused on margin pressure as the company’s next earnings report approaches
Shares of Super Micro Computer dropped 5% on Tuesday after Goldman Sachs issued a bearish call, reigniting concerns over the AI server maker’s profitability.
The timing is crucial since investors have viewed SMCI as a stand-in for AI infrastructure spending. Now, the conversation has moved. It’s not about whether demand is there anymore, but rather who can hold onto margins as hardware turns into a commodity.
As earnings season kicks off and rate expectations lose their grip on high-growth stocks, that question is gaining traction. For Super Micro, the upcoming report needs to prove it can grow without sacrificing too much on pricing.
U.S. stocks slipped on Tuesday, dragged down by financials despite inflation data meeting expectations. “Financials are getting hit by Trump’s credit-card proposal,” noted Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder. 1
Goldman Sachs analyst Katherine Murphy initiated coverage on Super Micro with a Sell rating, cutting the 12-month target price to $26 from $34. She acknowledged the company as “a leader in the AI server market” but highlighted “limited visibility” around profit gains. Murphy flagged margin pressure from large, margin-dilutive deals and noted the firm is stuck between a tight customer base and powerful suppliers. 2
Barron’s, referencing a Goldman note, reported that the bank forecasts the company’s gross margin—its take after hardware costs—to drop to about 7.5% in fiscal 2026, down from over 15% in 2022, amid rising costs and stiffer competition. 3
Super Micro missed quarterly estimates in November due to delivery delays caused by last-minute configuration changes, Reuters reported. About $1.5 billion in revenue got pushed into a future quarter. CEO Charles Liang attributed the hold-up to the added integration and testing demands of new GPU rack systems. Despite this, the company raised its fiscal 2026 sales forecast to at least $36 billion. 4
The selloff hasn’t been linear. If Super Micro manages to boost margins while shipments increase—or if demand holds firm enough to keep prices steady—Tuesday’s downgrade might be short-lived.
The downside is straightforward: ongoing margin pressure, larger competitors undercutting prices, and the company continuing to secure deals that boost revenue but hurt profits, leaving minimal margin for error.
Macro factors are at play. U.S. consumer prices increased 0.3% in December, maintaining a 2.7% annual rate. This keeps the Federal Reserve on track to hold rates steady at its Jan. 27-28 meeting, according to Reuters. 5
Traders are set to focus on follow-up analyst calls and any signals from the wider AI hardware supply chain around costs and pricing — the areas that usually impact margins earliest — ahead of the next session.
Super Micro’s upcoming earnings report, pegged by Nasdaq’s earnings calendar for Feb. 24, is the next key event to watch. 6
