Investor sentiment on SMCI stock is 'mixed to negative', Goldman warns

After a substantial rally in 2024 and over the last 12 months, SMCI's stock has taken a slight dip over the last month. While many may have seen the pullback as another entry point, analysts at Goldman Sachs have warned that sentiment is now “mixed to negative” on the stock.The investment bank told investors in a note Thursday that the stock is an artificial intelligence winner, but “investor feedback mixed to negative” based on the current valuation.

Based on Goldman Sachs’ conversations with investors, they believe a key debate is whether SMCI should be able to sustain its competitive advantage and speed-to-market on AI servers, given the rising competition from other AI server OEM’s that were not fast-to-market in early 2023. This may be particularly the case as demand expands beyond hyperscaler and AI CSP to enterprise.The question for investors now is whether the rally will continue.

Meanwhile, Argus initiated coverage of the company with a Buy rating and a $1,350 price target, describing it as a"leading computer and server provider for the age of generative AI."

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