- \n
- Mehdi Hosseini at Susquehanna recommends selling Supermicro. His target of $15 per share implies 69% downside from its current share price of $48.<\/li>\n
- Kevin Cassidy at Rosenblatt Securities recommends selling Intel. His target of $14 per share implies 66% downside from its current share price of $41.<\/li>\n<\/ul>\n
Here’s what investors should know about these artificial intelligence stocks.<\/p>\n
![\"A](\"https:\/\/www.europesays.com\/us\/wp-content\/uploads\/2025\/10\/market-red-11.jpg\"\/)
<\/p>\nImage source: Getty Images.<\/p>\n
Super Micro Computer: 69% implied downside<\/p>\n
Supermicro designs and manufacturers storage systems, compute subsystems, and servers, including liquid cooling and rack-scale solutions, for artificial intelligence<\/a> (AI). Supermicro was quick to establish a leadership position in AI servers, partly because its modular approach to product development lets it quickly build a wide range of servers when partners like Nvidia release new chips.<\/p>\n
However, Mehdi Hosseini at Susquehanna says Supermicro lacks a competitive moat. It simply buys hardware from innovative companies like Nvidia and assemblers the parts into data center<\/a> systems.<\/p>\n
Other analysts have also voiced concerns about competition. Dell<\/strong> Technologies <\/strong>recently became a supplier for CoreWeave<\/strong> and xAI<\/a>, two companies that have historically been Supermicro clients.<\/p>\n
Supermicro reported disappointing financial results in the fourth quarter of fiscal 2025, which ended in June. Revenue increased 7% to $5.8 billion, gross margin<\/a> dropped 70 basis points<\/a>, and non-GAAP<\/a> (generally accepted accounting principles) net income fell 24%. That margins have narrowed in the last several quarters is concerning because it implies Supermicro is losing pricing power, which itself supports the argument that the company lacks a competitive advantage.<\/p>\n
Wall Street expects Supermicro’s adjusted earnings to grow at 22% annually over the next two years. That makes the current valuation of 29 times earnings<\/a> look reasonable. But analysts have overestimated in the past. Supermicro missed the consensus estimate by an average of 15% during the last five quarters.<\/p>\n
I doubt shares will tumble 69%, but investors should look for AI stocks with stronger competitive advantages.<\/p>\n
<\/p>\n
Today’s Change<\/p>\n
(0.31%) $0.12<\/p>\n
Current Price<\/p>\n
$38.28<\/p>\n
Key Data Points<\/p>\n
Market Cap<\/p>\n
$179B<\/p>\n
Day’s Range<\/p>\n
$37.83 – $41.12<\/p>\n
52wk Range<\/p>\n
$17.66 – $41.12<\/p>\n
Volume<\/p>\n
246M<\/p>\n
Avg Vol<\/p>\n
128M<\/p>\n
Gross Margin<\/p>\n
51.37%<\/p>\n
Dividend Yield<\/p>\n
N\/A<\/p>\n
Intel: 66% implied downside<\/p>\n
Intel reported encouraging third-quarter financial results, including a significant beat on the bottom line. Revenue rose 3% to $13.7 billion, and non-GAAP earnings were $0.23 per diluted share, up from a loss of $0.46 per diluted share last year. Management also said its partnership with Nvidia could help the company gain a foothold in the artificial intelligence race.<\/p>\n