-- Super Micro Computer (SMCI) enters earnings with uncertainty over another corporate governance issue related to illicit shipments of Nvidia-based servers into China, which could possibly impact its core business, Wedbush Securities said in a note Monday.
The brokerage said its supply chain checks suggest the company's sales plan for fiscal 2026 might not be affected, but there are also indications that enterprise customers are more likely to choose alternatives.
Analysts said they expect larger customers with near-term order deliveries to remain with Super Micro Computer, as supply chain challenges could make it difficult to find alternative suppliers. However, large customers might use the company's struggles as leverage with future orders, according to the note.
The brokerage raised concern that even if the Department of Justice litigation focuses on a few bad actors, the company could still be forced to make changes to its executive suite.
The company is set to report fiscal Q3 results on Tuesday.
Wedbush maintained a neutral rating on Super Micro Computer, with a price target of $42.
Shares of Super Micro Computer were up more than 4% in Monday trading.
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