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Super Micro shares jump as AI-bet gears up for S&P 500 entry

Published 03/04/2024, 06:32 AM
Updated 03/04/2024, 09:46 AM
© Reuters. FILE PHOTO: Logos of Super Micro Computer are pictured at COMPUTEX Taipei, one of the world's largest computer and technology trade shows, in Taipei, Taiwan May 30, 2023. REUTERS/Ann Wang/File Photo

(Reuters) -Shares of Super Micro Computer (NASDAQ:SMCI) jumped 14% on Monday after the artificial-intelligence server maker was set to join the S&P 500 index, highlighting the growing dominance of AI stocks in Wall Street's benchmark index.

The San Jose, California-based firm is among the biggest beneficiaries of the AI frenzy on Wall Street.

Its shares have climbed 1,000% since the end of 2022, including a more than three-fold jump in 2024, taking its market value to $50.6 billion.

As part of the quarterly rebalance of the most widely followed stocks index, Super Micro and Deckers Outdoor (NYSE:DECK) Corp will join the S&P 500 on Monday, March 18, replacing Whirlpool Corp (NYSE:WHR) and Zion Bancorp.

Deckers Outdoor shares gained 5.4% and Zion Bancorp slipped 2.2%.

Super Micro and Deckers Outdoor will benefit from readjustments at popular index funds that track the S&P 500 and have assets of about $7.8 trillion, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

About $30.1 billion in rebalance trading will take place before March 18, Silverblatt estimated.

Money managers are on the hunt for other companies that are capitalizing on the AI boom after bellwether Nvidia (NASDAQ:NVDA)'s stunning stock rally recently made it the third most valuable U.S. company.

© Reuters. FILE PHOTO: Logos of Super Micro Computer are pictured at COMPUTEX Taipei, one of the world's largest computer and technology trade shows, in Taipei, Taiwan May 30, 2023. REUTERS/Ann Wang/File Photo

In late January, Super Micro delivered blowout quarterly results and raised its full-year revenue forecast significantly ahead of Wall Street estimates.

The stock was last trading at $1,034.76, inching towards its all-time high of $1,077.87 hit on Feb. 16.

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