Goldman Initiates Coverage on Super Micro Computer Stock With Cautious Neutral Rating Despite Favorable Long-Term Outlook

Goldman Sachs initiated coverage on Super Micro Computer (SMCI) stock with a "neutral" rating and $941 price target, implying 17% downside from current levels around $1,140.

Goldman analysts believe SMCI's massive stock run-up has been warranted due to strengths in high-performance servers and status as an "AI winner".

However, Goldman thinks much of the positive near-term growth is priced in, with SMCI trading at 52X expected earnings.

While volatility may continue and Goldman's target could prove accurate, SMCI's business outlook remains favorable for long-term investors.

High risk tolerance investors could still benefit from a buy-and-hold approach, but a balanced portfolio avoiding overexposure to any one AI stock is recommended.