By George Glover

The market is having one of its better weeks of recent times -- but onetime artificial intelligence darling Super Micro Computer Inc. has missed the party.

The server maker's shares, which trade under the ticker SMCI, have tumbled 12% to $37.04 since Monday's opening bell. The drop is enough to make Super Micro the worst S&P 500 performer in a week where the benchmark index is up 0.8%.

The shares were under pressure again Thursday, falling 1.1% ahead of the open.

President Donald Trump's tariffs have been the main story for the broader market, but SMCI has been grappling with a different issue. On Monday, Goldman Sachs analyst Michael Ng cut his rating on the stock to Sell and slashed his price target to $32 from $40.

Ng warned that the company could soon lose its edge in the AI space amid increased competition, which could apply even more pricing pressure. Super Micro's gross profit margins dropped from 18% to 13.9% last fiscal year, and Ng expects them to carry on sliding.

The downgrade appears to have punctured a rally that had briefly made SMCI the S&P 500's top performer of 2025. Before the start of this week, the stock was up 40% for the year, compared with a 3.4% for the large-cap U.S. gauge.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

March 27, 2025 07:45 ET (11:45 GMT)

Copyright (c) 2025 Dow Jones & Company, Inc.