Onetime AI stock standout Super Micro Computer saw its shares fall on Friday after getting a second downgrade this week from a Wall Street analyst. SMCI stock is now down 69% from its peak, reached just six months ago.
JPMorgan analyst Samik Chatterjee on Friday lowered his rating on SMCI stock to neutral from overweight, or buy. He also slashed his price target on the data-center specialist to 500 from 950.
On the stock market today, SMCI stock dropped 6.8% to close at 386.46.
Chatterjee cited the company's recent move to delay the filing of its annual report on form 10-K with the U.S. Securities and Exchange Commission. That action creates uncertainty for investors and puts an overhang on SMCI stock, he said.
Super Micro's SEC filing delay came after short seller Hindenburg Research accused the company of accounting irregularities.
"To be clear, our downgrade is not led by lower confidence in the company's ability to regain compliance in relation to regulatory filings or related to any of the tenets of the Hindenburg report," Chatterjee said in a client note.
'More Cautious View' Of SMCI Stock
However, he sees no reason for new investors to buy SMCI stock while the company reviews its internal controls for financial reporting.
Investors also are concerned about lower-than-expected gross profit margins for the company's data center gear for artificial intelligence applications.
On Wednesday, Barclays analyst George Wang downgraded SMCI stock to equal weight from overweight. He also cut his price target to 438 from 693.
Super Micro stock hit a record high of 1,229 on March 8 amid investor excitement over the generative artificial intelligence boom.
Wang said his downgrade was based on the company's poor gross margins in its June-quarter report as well as the 10-K filing delay.
As a result, he has taken a "more cautious view" of Super Micro due to a "lack of visibility" on gross margin trends, ongoing customer erosion, and the need for better financial controls and corporate governance.
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