Supermicro stock faces serious trouble as Bank of America analyst Ruplu Bhattacharya slashed his rating on the company. The expert set a target price of just $35 per share, which means the stock could drop 28 percent from current levels. Bhattacharya pointed out five major problems that could hurt the AI server company. These issues range from margin pressure to increased competition from Dell and HP. Legal troubles and weak internal controls also worry investors about the company's future.
The analyst expects Supermicro's profit margins to shrink from 11.3 percent to just 9.4 percent over the next few years. Older inventory sits on shelves and creates financial headaches for the business. Dell and HP keep stealing customers away from...