S&P 500 to add Super Micro

The S&P Dow Jones Indices revealed their quarterly rebalancing decisions on Friday. Whirlpool and Zions Bancorporation will be replaced by SMCI and Deckers Outdoor in the index. The modifications are scheduled to go into effect on Monday, March 18, before the market opens.

The SMCI stock had a strong run in 2024, which led to the change, which tries to make the index more reflective of its market cap range.

Amid an unparalleled boom in the artificial intelligence (AI) business, the creator of AI servers saw its share price more than treble over the previous two months, increasing its market capitalization to over $50 billion.

The company's most recent quarterly report, which revealed that its net sales more than quadrupled year-over-year, attested to the demand for Super Micro's products. Quarterly sales increased by 73%.

Additionally, SMCI increased its revenue forecast for the fiscal year 2024, going from a range of $10 billion to $11 billion to a range of $14.3 billion to $14.7 billion.

Like Nvidia, Super Micro plays a crucial role by providing fuel for the engines powering the AI age.

More specifically, servers and storage systems for data centres and large enterprises are SMCI's areas of expertise. In contrast to Nvidia and SK Hynix, which produce discrete parts like RAM and GPUs, Supermicro incorporates these parts into whole server racks designed for big business customers.

It should come as no surprise that the San Jose, California-based startup is seeing strong demand given the notable surge in corporate AI spending. This is due to the fact that AI initiatives are carried out on Supermicro's servers.

(Sources: investing.com, reuters.com)