Super Micro Computer Faces Uncertainty with Nasdaq 100 Listing: Can Partnerships with xAI and Nvidia Provide Stability?

Super Micro Computer Inc. (SMCI) is currently in a precarious position, with its inclusion in the Nasdaq 100 Index at stake.

As the index prepares for its annual reshuffle in December, the San Jose, California-based company finds itself on the verge of being removed, joining other underperforming stocks such as Moderna Inc (MRNA) and Biogen Inc (BIIB).

Super Micro Computer experienced a surge in its market capitalization to $67 billion due to increasing demand for artificial intelligence infrastructure. However, a recent auditing issue has drastically reduced its market cap, which now sits at around $20.4 billion.

The auditing firm Ernst & Young raised concerns about governance issues, leading to anxieties among investors. Nonetheless, a special committee later found these concerns to lack sufficient evidence.

During a recent conference, CEO Charles Liang assured investors of the company's commitment to meeting financial deadlines and anticipated a resolution by February.

Liang highlighted Super Micro’s strong relationships with key clients like xAI and Nvidia Corp (NVDA), suggesting these partnerships might help secure its future in the market.

Mixed Signals from Super Micro Computer's Stocks

Analysis of Super Micro Computer's stock performance reveals conflicting indicators.

Chart created using relevant stock analysis tools

Currently trading at $37.95, the stock is below its eight-day simple moving average (SMA) of $41.47, hinting at short-term selling pressure. However, the 20-day SMA of $33.38 and the 50-day SMA of $37.10 imply some medium-term strength, providing a glimmer of hope.

Still, the longer-term outlook appears grim, with the 200-day SMA resting at $67.21, emphasizing the significant decline this stock has faced.

Insights from JPMorgan

Despite the general market skepticism, JPMorgan has pointed out some stability within Super Micro's order book and customer relationships. They noted a consistent flow of orders and no indication of major customer loss.

With Nvidia's Blackwell product line set for substantial growth in late fiscal 2025, Super Micro's role in AI infrastructure could be instrumental for its recovery.

Final Thoughts

The decision regarding Super Micro's status on the Nasdaq 100 will depend on its market value compared to stronger contenders, such as Palantir Technologies Inc (PLTR) and MicroStrategy Inc (MSTR). The company is racing against time to prove its worth among the leaders in the tech industry.

Stay tuned — the upcoming decision could mark a pivotal moment for this AI infrastructure pioneer.

SuperMicro, Nasdaq, AI