Server maker Super Micro Computer saw its stock take another hit on Friday, dropping by almost 7% after a downgrade from JP Morgan’s analysts.
According to a note sent out to clients, JP Morgan’s Samik Chatterjee and his team believe that uncertainty revolving around Super Micro’s delayed annual report has been part of their decision to change the rating of the company’s stock from “Neutral” to “Overweight.”
Additionally, the analysts have slashed the stock price target from $950 to $500.
“As a result of our expectations for a near-term overhang for the shares from the uncertainty, we prefer to recommend new investors to remain on the sidelines till the company is back in compliance,” the note said.
Super Micro benefited from the recent artificial intelligence boom due to its capability to produce servers that run AI software. The company’s shares have skyrocketed early in 2024, being 300% up at one point.
However, Super Micro’s stock has recently crashed from its all-time high of $1188.07 per share in March. Aside from a recent overall fall of tech stocks, the company was also hampered by a report shared by short-seller Hindenburg Research that accused Super Micro of “widespread accounting violations,” among other things.
Shortly after Hindenburg’s report came out, Super Micro also delayed the filing of its annual report with the U.S. Securities and Exchange Commission (SEC).
After a recent slump, Super Micro’s stock closed at $386.46 per share on Friday. It still remains 35.39% up year-to-date.