Super Micro Computer, Inc. (NASDAQ: SMCI), the Silicon Valley-based leader in AI server technology, is projecting an ambitious $40 billion in future annual sales, even as its shares face renewed pressure following a downgrade from Goldman Sachs.
The company, widely known for its rapid growth in supplying high-performance servers to the artificial intelligence and cloud computing markets, has seen its stock price tumble more than 70% from its March 2024 peak. Shares were trading near $32.71 on Tuesday, a sharp reversal after a meteoric rise that saw SMCI gain over 250% in the prior year.
Super Micro’s management remains undeterred. In a recent investor update, executives outlined a long-term vision to reach $40 billion in annual sales, banking on continued expansion in AI data centers and next-generation server platforms. The company’s growth has been fueled by surging demand from hyperscale customers and enterprise clients racing to build out AI infrastructure.
However, the outlook has been clouded by a series of guidance cuts. Last week, Super Micro slashed its revenue forecast for the current quarter to a range of $4.5 billion to $4.6 billion, down from earlier projections of $5 billion to $6 billion. Adjusted earnings per share were also revised lower, as the company cited delayed customer spending, higher inventory levels, and postponed large-scale projects.
The cautious tone was echoed by Goldman Sachs, which downgraded SMCI to “Sell” from “Neutral” and lowered its 12-month price target to $32. The investment bank pointed to intensifying competition in the AI server market, margin pressures, and valuation concerns as key reasons for the downgrade. Analysts at Goldman noted that while Super Micro remains a significant player in the sector, the risk-reward profile has shifted amid growing rivalry and economic uncertainty.
Wall Street remains divided on the company’s prospects. Analysts are forecasting $4.84 billion in revenue and adjusted EPS of $0.44 for the upcoming earnings report, reflecting a year-over-year revenue increase but a notable drop in profitability.
The average analyst price target stands at $44.93, with estimates ranging widely as investors weigh the pace of AI infrastructure spending against Super Micro’s ability to execute on its growth strategy.
Despite recent setbacks, Super Micro’s leadership remains confident in the company’s long-term trajectory. The next earnings report, expected after the market close, will be closely watched for signs of stabilization and renewed momentum in the competitive AI server landscape.
For now, Super Micro Computer stands at a crossroads, balancing bold ambitions with the realities of a rapidly evolving market and heightened investor scrutiny.