Super Micro Computer, Inc. (NASDAQ: SMCI) is a top AI stock on Wall Street. Analyst Katherine Murphy initiated coverage with a “Sell” rating and $26 price target due to margin pressure and limited profitability visibility. Despite AI server leadership, SMCI may face challenges with margin dilutive deals and competition.

Murphy believes SMCI will lead in AI servers, especially in tier 2 cloud markets, but profitability visibility is limited. Large margin dilutive deals, competition, and investments in enterprise scaling may hinder major gains this year. Margin has halved in the last three years, with limited improvement expected.

Super Micro Computer, Inc. designs and manufactures high-performance server and storage solutions globally. While SMCI shows investment potential, other AI stocks may offer higher upside with less risk. For an undervalued AI stock benefiting from tariffs and onshoring trends, check out the best short-term AI stock in a free report.

Read more at Yahoo Finance: Goldman Sachs Starts Coverage on Super Micro (SMCI) With Sell, $26 Target