Bank of America has lowered its price target on Super Micro Computer to $24, down from $34, following an indictment unveiled by the U.S. Attorney's Office in New York that implicates three individuals connected to the company in an alleged scheme to export servers containing restricted GPUs into China.
The broker emphasized that Super Micro itself is not named as a defendant in the indictment. Nonetheless, BofA said the development raises reputational and operational risks that could affect the company.
Personnel actions tied to the investigation include two employees being placed on administrative leave, a contractor being terminated, and the resignation of a senior executive who also served on the board. BofA highlighted that these changes, together with the legal matter, may prompt suppliers to tighten access to critical components such as GPUs or apply more stringent compliance controls.
On the customer side, BofA warned that some clients could opt to delay purchases or reallocate contracts to competitors, explicitly naming Dell Technologies and Hewlett Packard Enterprise as potential beneficiaries of such shifts.
Financial view and rating
The brokerage kept an Underperform rating on the shares. BofA pointed to continued pressure on margins due to intensified competition, rising component costs, and elevated spending on engineering and services. It expects gross margins to remain materially below prior levels.
Although the bank did not alter its revenue and earnings forecasts, it reduced the valuation multiple applied to the company to reflect heightened risk, moving to a lower earnings-multiple basis for its revised price target.
BofA also noted that strong recent revenue growth could be vulnerable if large deals become more contested or are postponed as a result of the situation.
Controls and reporting
The report flagged continuing concerns with internal controls. The company disclosed multiple material weaknesses in its financial reporting as of the end of 2025, a factor the bank incorporated into its assessment of risk.
Overall, BofA's action reflects a reassessment of valuation in light of legal exposure and governance questions, even as its near-term financial projections remained unchanged.