Citi Is the Latest Bank to Sour On Super Micro Computer Stock

3 hours ago 1

Joel South

Tue, March 24, 2026 astatine 10:33 AM CDT 4 min read

Super Micro Computer (SMCI) trades astatine $21.58 aft losing 48.8% implicit the past year, with Citi cutting its terms people to $25 citing export-control allegations against co-founder Yih-Shyan Liaw that elevate estimation risk, portion the institution reported Q2 FY2026 gross of $12.68B (up 123.36% twelvemonth implicit year) but saw GAAP gross borderline compress to 6.3% from 11.8%. Dell Technologies (DELL) and Hewlett Packard Enterprise (HPE) airs competitory threats arsenic customers whitethorn displacement AI server procurement during the ineligible proceedings.
Export-control indictments charging Super Micro’s co-founder with a $2.5B strategy to smuggle precocious Nvidia AI chips to China triggered a crisp reputational situation that compressed the stock’s valuation aggregate and threatens lawsuit relationships arsenic endeavor buyers see shifting orders to competitors.
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Super Micro Computer (NASDAQ:SMCI) has been successful freefall. The banal is down -32% implicit the past week, and Wall Street analysts stay bearish connected the stock. The Street's statement terms people sits astatine $40.73, with 7 analysts standing the banal a Hold and 7 a Buy. But Citi has breached sharply from that pack, cutting its terms people to $25 from $39 and maintaining a Neutral rating, citing export-control allegations that materially elevate estimation risk. At the existent terms of $21.58, Citi's $25 people implies upside from the existent price. But tin SMCI realistically scope $25 by extremity of 2026?

The export-control allegations against 3 individuals associated with Super Micro, including its co-founder, elevate the company's estimation risk, and the shares warrant a little valuation pending much visibility connected the company's way forward. The indictment, unsealed March 20-21, 2026, charges co-founder Yih-Shyan "Wally" Liaw with conspiring to smuggle precocious Nvidia AI chips to China successful a strategy valued astatine $2.5 billion. Liaw has since resigned from the board. The reputational harm compounds an already hard backdrop: SMCI's GAAP gross borderline compressed to 6.3% successful Q2 FY2026, down from 11.8% a twelvemonth prior.

AI Infrastructure Demand: SMCI's Data Center Building Solutions level and Blackwell Ultra GPU server ramp presumption it wrong the fastest-growing conception of endeavor tech spending. The institution reported implicit $13 cardinal successful Blackwell Ultra orders arsenic of Q1 FY2026, a long-cycle gross awesome applicable to semipermanent investors.
Revenue Scale: Q2 FY2026 gross reached $12.68 billion, increasing 123.36% twelvemonth implicit year, with full-year FY2026 guidance of astatine slightest $40 billion. That trajectory, if sustained, supports a materially higher valuation level implicit time.
Valuation Reset: SMCI trades astatine a guardant P/E of astir 8x, good beneath humanities norms for a high-growth AI infrastructure provider. That compressed aggregate reflects however importantly the marketplace has repriced the banal amid governance concerns.