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Super Micro plummets 8% following Nasdaq 100 removal

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Super Micro Computer, a prominent tech company, recently experienced a significant event as it was removed from the Nasdaq 100 index. This decision caused a dip in the company’s stock price by 8%. Five months ago, Super Micro had proudly joined the Nasdaq 100, representing the top 100 nonfinancial stocks on the Nasdaq exchange, which includes the popular Invesco QQQ Trust exchange-traded fund.

The reversal in fortune for Super Micro comes after a tumultuous year for the company. In March, the company’s shares hit a record high of $118.81, driven by the high demand for its servers equipped with artificial intelligence processors. This surge catapulted the company’s market cap to over $70 billion, warranting consideration for inclusion in the S&P 500 index.

However, in a drastic turn of events, Super Micro’s value has now plummeted to approximately $20 billion, significantly lower than the median market cap of companies in the Nasdaq 100 index. Alongside Super Micro, Nasdaq also announced the removal of Illumina and Moderna from the index, effective December 23, to make way for new additions like Axon Enterprise and Palantir Technologies.

Industry experts speculate that the decline in Super Micro’s stock price may be attributed to various factors. The company faced challenges earlier in the year when it delayed filing its annual report with the SEC and encountered allegations of accounting manipulation. The resignation of its auditor, Ernst & Young, further exacerbated the situation, causing a substantial drop in the stock price.

Despite these hurdles, in a preliminary earnings report, Super Micro reported a 181% increase in revenue for the third quarter, albeit below consensus. CEO Charles Liang expressed optimism during a conference call with analysts, citing strong competition from rivals like Dell and HPE but asserting the company’s favorable position in the market.

The removal from the Nasdaq 100 index is a significant blow to Super Micro, signaling a turbulent period for the company. Analysts and investors closely monitor the company’s future actions, especially as it navigates challenges and strives to realign its growth trajectory in a competitive tech landscape. Time will tell how this event shapes Super Micro’s future and its standing in the industry.

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