Mackenzie Tatananni

Shares of Super Micro Computer were rising sharply on Monday, even as the broader market wavered in the wake of uncertainty unleashed by President Donald Trump's tariffs.

Super Micro stock climbed 9.9% to $33.51, snapping a two-day losing streak and outperforming the S&P 500, which was down 0.5%. The maker of servers was also surging ahead of peers, as HP and Dell Technologies rose 2.5% and 5.3%, respectively, and U.S.-listed shares of Lenovo Group cratered 17%. Monday's gains put Super Micro on pace for its largest same-day percent increase since a 11% jump in March, according to Dow Jones Market Data.

Super Micro makes servers for artificial-intelligence data centers, and all of its revenue is from hardware sales. J.P. Morgan noted last week that the company would need to raise its global prices by just 4%, based on the portion of hardware that would be impacted by tariffs.

Super Micro stock's surge today has lifted its year-to-date gain to 7.7%, even though shares have fallen 65% over the past 12 months. Concerns around the stock's potential delisting from the Nasdaq exchange played a major role in their decline. Super Micro stock wavered in February ahead of the deadline to file delayed annual and quarterly reports with the Securities and Exchange Commission.

Super Micro did file, and narrowly avoided delisting, although shares are down 36% since markets closed on Feb. 24. The stock can make up for that lost ground, according to J.P. Morgan analysts who noted last month that the company would benefit from growing demand for its servers powered by Nvidia Blackwell chips.

However, near-term gains could be partially offset by worries about margin trajectory, as competition in the sector drives aggressive pricing and gross-margin pressures, J.P. Morgan said.

Others are more wary. Just last week, Goldman Sachs downgraded Super Micro stock to Sell from Neutral, and cut its price target to $32 from $40. The firm highlighted similar problems, arguing that Super Micro's edge in the AI market was at risk.

Most Wall Street observers are on the sidelines. Of 15 analysts who cover Super Micro stock, four have Buy ratings, nine are at Hold, and two have Sell ratings, according to FactSet.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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April 07, 2025 15:00 ET (19:00 GMT)

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