1、 BofA Securities does and seeks to do business with issuers covered in its research reports.As a result,investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.Investors should consider this report as only a single factor in making the

2、ir investment decision.Refer to important disclosures on page 35 to 37.Analyst Certification on page 33.Price Objective Basis/Risk on page 33.12849026 Super Micro Computer Inc.AI server market is getting crowded;resume coverage at Underperform;PO$35 Resuming Coverage:UNDERPERFORM|PO:35.00 USD|Price:

3、49.11 USD Revenue growth can be high;but at the cost of margin We resume coverage of Super Micro(SMCI)with an Underperform rating and a price objective of$35(29%potential downside).We think:1)margins will remain under pressure in a more competitive AI server/rack market;2)availability of components(

4、GPUs,liquid cooling components)may limit revenue growth;3)competitors Dell and HP Enterprise have an advantage with enterprise customers;4)over time,liquid cooling may get commoditized,and competitors could close the gap versus SMCIs larger manufacturing capacity,and 5)various litigation/investigati

5、ons pose some headline risk as does the pace of managements effort to address material weakness in internal controls.GM in the near-term is impacted by higher inventory reserves for older gen products.While our revenue estimates are higher than consensus,we are materially below Street on earnings(we

6、 model GM declining 200bps from 11.3%in F25 to 9.4%in F27).Show me story as company moves beyond past issues We think SMCI should trade at a discount to peers.It is continuing to work on certain material weaknesses in internal controls even as it avoided getting de-listed earlier this year after it