Super Micro Computer falls after Goldman Sachs downgrades to 'sell'

Shares of server maker Super Micro Computer SMCI.O fall 2.1% to $41.26 premarket

Goldman Sachs downgrades stock to "sell" from "neutral," cuts PT to $32 from $40

Says it views Super Micro's risk-reward as unfavorable, given downside risks on valuation, competition, and gross margins

Adds "Competition in AI servers is intensifying due in part to less product differentiation following investments from competitors in recognition of the large market opportunity, which likely will pressure SMCI's early market share leadership in AI servers"

SMCI's gross margins likely will decline in FY25/26/27 on increasing competition, the Blackwell product transition, and pressure from its largest customers & suppliers - Goldman Sachs

Five of 14 brokerages rate the stock "buy", seven "hold" and two "sell"; their median PT is $54.50 - data compiled by LSEG

Up to last close, SMCI up ~38% YTD