Two of the most closely watched artificial intelligence (AI) stocks, Super Micro Computer (NASDAQ/SMCI) and Intel (NASDAQ/INTC), may be headed for a significant correction, according to Wall Street analysts.
Despite both companies’ partnerships with Nvidia and substantial year to date gains, recent forecasts suggest steep potential declines of up to 69% for Supermicro and 66% for Intel.
Analysts Mehdi Hosseini of Susquehanna and Kevin Cassidy of Rosenblatt Securities have issued sell ratings, pointing to weak competitive advantages, margin pressure, and increased competition in the AI hardware market.
Investor enthusiasm around artificial intelligence has driven a rally across the semiconductor and data infrastructure sectors.
Super Micro Computer’s stock has gained 57% year to date, while Intel’s shares have surged 90%, largely due to optimism over AI server demand and collaborations with Nvidia.
Supermicro has emerged as one of the leading suppliers of AI servers, providing high performance systems that integrate Nvidia’s advanced graphics processing units (GPUs).
Intel, on the other hand, has benefited from growing interest in its AI chips and data center processors, even as it works to regain lost market share from rivals like AMD and ARM based competitors.
However, analysts warn that both companies face structural headwinds that could weigh heavily on their valuations over the next year.
Hosseini, a senior semiconductor analyst at Susquehanna International Group, maintained a bearish view on Supermicro, setting a price target of $15 per share implying a 69% downside from current levels near $48.
“Supermicro’s business model relies heavily on component suppliers like Nvidia and AMD,” Hosseini said. “It has little proprietary technology that differentiates it from competitors assembling similar systems.
That lack of a competitive moat makes its margins vulnerable to pricing pressure.” Similarly, Kevin Cassidy of Rosenblatt Securities warned that Intel’s recent stock rally may have outpaced its fundamentals.
Cassidy issued a $14 price target, representing a 66% potential decline from its current trading price of around $41. “Intel’s turnaround story remains incomplete,” Cassidy said.
“The company faces execution risk in manufacturing, and its AI ambitions still trail those of Nvidia and AMD. Investors may have been too quick to price in a full recovery.”
Supermicro’s most recent quarterly report underscored some of those concerns. For the fourth quarter of fiscal 2025, which ended in June, the company reported $5.8 billion in revenue, up seven percent year over year.
However, gross margins fell by 70 basis points, and non GAAP net income dropped 24%. Wall Street analysts have repeatedly overestimated Supermicro’s profitability. Over the last five quarters, the company has missed consensus earnings estimates by an average of 15%.
Intel, while showing signs of recovery in its data center and client computing segments, continues to struggle with manufacturing costs and competitive pricing.
According to market research firm TrendForce, Intel’s data center market share declined from 85% in 2020 to 65% in 2025, as cloud providers increasingly turned to alternatives optimized for AI workloads.
Market observers and investors appear divided on whether the bearish projections are warranted. “Supermicro is still in a growth phase, and its modular design approach allows it to respond quickly to new chip releases,” said Erin Walters, a technology portfolio manager based in New York.
While the margin compression is a concern, the demand for AI infrastructure remains strong, and that could offset some of the downside risk.
In contrast, Michael Tran, an independent equity analyst in San Francisco, said that competition in the AI server market is heating up faster than Supermicro can adapt.
Companies like Dell Technologies are aggressively targeting Supermicro’s core clients, including CoreWeave and xAI, he said. “Without a clear product differentiation strategy, Supermicro could struggle to defend its market position.”
For Intel, some investors remain optimistic that its foundry business and government partnerships could provide a long-term buffer.
“Intel is benefiting from the U.S. semiconductor policy push,” said Lauren Patel, a research director at GlobalTech Insights. “But the road to AI competitiveness is still long and uncertain.”
Both Supermicro and Intel are positioning themselves to capture more of the AI hardware market, but analysts remain cautious.
Supermicro’s future growth depends heavily on maintaining relationships with chipmakers and cloud providers, while Intel must execute on its multi year plan to regain leadership in semiconductor manufacturing and AI chip design.
Wall Street projects Supermicro’s adjusted earnings to grow at 22% annually over the next two years. While that suggests reasonable valuation metrics, analysts emphasize that these forecasts are far from guaranteed given past volatility.
Intel’s recovery trajectory may also face delays as it ramps up new manufacturing processes and contends with global supply chain challenges.
“The AI investment cycle is still in its early stages,” Hosseini added. “But not every participant will be a long term winner. Some stocks will face correction as expectations normalize.”
As investor attention remains fixated on AI related opportunities, analysts are warning of potential overvaluation risks among key Nvidia partners.
Super Micro Computer and Intel, despite strong year to date gains, may encounter headwinds from rising competition, shrinking margins, and execution challenges.
While the broader AI ecosystem continues to expand, Wall Street’s latest forecasts serve as a reminder that even the sector’s top performing stocks are not immune to correction pressures.