JPMorgan Downgrades Super Micro Computer

JPMorgan analysts on Friday cut their rating on Super Micro Computer (NASDAQ: SMCI) shares from Overweight to Neutral. SMCI stock slipped less than 1% in premarket trading.

The downgrade comes as Wall Street anticipates Super Micro to navigate current challenges, notably the evaluation of internal controls and delays in regulatory filings. JPMorgan highlighted the importance of progress on these filings and Super Micro’s response to competitive pressures in the AI server market as critical factors to watch in the near to medium term.

Analysts clarified that the downgrade is not due to a lack of confidence in Super Micro’s ability to regain compliance with regulatory filings nor concerns stemming from the Hindenburg report. Instead, the decision is based on a near-term view indicating a lack of clear rationale for new investors to step into SMCI shares while uncertainty exists around regaining compliance with regulators, which is critical beyond the unchanged business fundamentals.

Additionally, the possibility of SMCI engaging in aggressive pricing to retain customers could impact margins and prompt a competitive response from industry peers. Analysts noted, “While we expect the company meeting regulatory requirements to be a potential positive catalyst, evidence of limited changes in customer demand or margin outlooks will be necessary for shares to fully recover to their prior earnings multiple over time.”

Overall, JPMorgan advises that given the near-term uncertainty surrounding the company, new investors should wait before taking positions until it regains compliance. The firm has also reduced its December 2025 price target from $950 to $500, reflecting a lower earnings multiple that aligns more closely with traditional IT hardware companies, which typically experience slower growth.