Super Micro Computer Faces Downgrade and Margin Woes: Is It Time to Look Elsewhere?

Super Micro Computer (NASDAQ:SMCI) shares fell 3% after Barclays downgraded the stock to "equal weight" with a price target of $438.

Barclays cited concerns about shrinking gross margins, customer attrition, and internal controls. Gross margins dropped to 11.3%, with AI server margins in the high single digits and low margins on DLC servers.

Super Micro has also lost market share to Dell (NYSE:DELL), especially with clients like Elone Musk’s ventures and Coreweave. Uncertainty around the new GB200 server platform and delayed 10-K filings add to concerns.