Envision Research has upgraded Super Micro Computer (SMCI) to Buy, arguing that recent selloffs have fully priced in near-term headwinds, while Gary Alexander moved Etsy (ETSY) to Neutral as the company shows recovery in gross merchandise sales. On the downside, Gary Alexander has downgraded Western Digital (WDC) to Sell amid concerns the storage boom may be peaking, and Daniel Jones shifted Chipotle Mexican Grill (CMG) to Hold as comparable restaurant sales decline in a challenging consumer environment.
Upgrades
- Super Micro Computer (SMCI): Upgrade Hold to Buy by Envision Research. The analyst believes SMCI’s recent selloff has fully accounted for near-term negatives, with massive investments in inventory and accounts receivable signaling a hyper-growth phase that should boost future cash flow.
“In terms of valuation, the combination of stock price pullbacks and updated EPS guidance has made SMCI attractively valued both in absolute terms and also in relative terms…in the near term, I expect the changes in revenue recognition and inventory to start boosting the company’s cash flow and also helping its margins in the meantime.”
- Etsy (ETSY): Upgrade Sell to Neutral by Gary Alexander. Etsy is showing signs of recovery with a return to GMS growth in Q4 and a “back to basics” strategy highlighted by the sale of Depop to eBay for $1.2 billion.
“Etsy’s recent correction over the past few months, which has erased most of 2025’s gains, has positioned the stock at a much more favorable valuation to achieve a rebound rally. The company has additional fuel from a recovery in GMS and revenue trends.”
Downgrades
- Western Digital (WDC): Downgrade Neutral to Sell by Gary Alexander. Despite strong 25% year-over-year revenue growth, the analyst warns that the AI-driven storage boom may be peaking and the company’s valuation is too rich relative to its margin profile and competitors.
“To me, all of Western Digital’s strengths are priced in, and I’m downgrading the stock now to a sell. … The major AI hyperscalers are accelerating their AI purchases into the current timeframe in order to race to build out AI applications. This doesn’t mean that this level of capex will be sustained in perpetuity.”
- Chipotle Mexican Grill (CMG): Downgrade Buy to Hold by Daniel Jones. While fundamentally strong, Chipotle faces pressure from a 2.5% decline in comparable restaurant sales and rising labor and occupancy costs as younger and lower-income consumers cut back spending.
“Given the worsening results on the bottom line that we saw during the final quarter and my own view that economic conditions are deteriorating in the US in a way that is pointing toward a recession, I think that downgrading the stock to a ‘hold’ is appropriate. … If the stock were cheaper, I would feel differently.”