According to a Monday press release, Super Micro Computer Inc. (NASDAQ: SMCI), will replace Walgreens Boots Alliance Inc. (NASDAQ: WBA), in the Nasdaq100 on July 22 nd.
The Nasdaq 100 index is a list of the 100 largest non-financial companies on the Nasdaq Composite.
Supermicro’s stock is still down by about 2.0% Monday.
Why is Walgreens losing their spot in Nasdaq100?
Nasdaq 100 requires that member companies maintain a minimum of 0.1% of their market value, which is currently over $20 trillion.
Walgreens has lost its place in the Nasdaq 100 after its stock fell more than 50% during this year. This has reduced its market cap to $10 billion, or about 0.05% of index’s value.
WBA’s stock fell particularly sharply in the last month, after it missed Street estimates for its third quarter and lowered its adjusted EPS guidance.
Why is Supermicro stock added to Nasdaq100?
Supermicro will replace Walgreens on the Nasdaq 100 in 2024, as its continued focus on artificial-intelligence has led to a significant rise in its shares.
A gain of more than 200% in SMCI year-to date has pushed the market cap of the AI-server company to $52 billion, or more than 0.25% the value of the Nasdaq100.
Super Micro Computer Inc shares are slightly down at the time of writing, despite the news that they will replace Walgreens on the index. This is a price movement that Jim Cramer, the famed investor, does not find justified.
What can I say? It’s [SMCI] a neighbor to Nvidia. Nasdaq is now a part of the Nasdaq 100. It should be going up, not down.
What can we expect from SMCI’s Q4 earnings report
Supermicro will report its financial results in mid-August. The consensus is that Supermicro will earn $7.63 per share, up from the $3.43 it earned last year.
The expected adjusted EPS will also represent a significant growth in the sequential period, considering SMCI earned a total of $6.65 per share during its fiscal Q3. Charles Liang, the Chief Executive of Super Micro Computer, said at the time that:
Our team’s ability and willingness to develop innovative DLC designs combined with the strong demand for AI rack-scale PnP solutions has allowed us to expand our leadership in AI infrastructure.
Supermicro estimates $14.7 billion to $15 billion in revenue for this year, compared to analysts’ $14.6 billion. Wall Street has a consensus rating of “overweight” on SMCI, and they see upside to $1 061 on average. This suggests a potential gain of close to 20% from here.
This post Supermicro will replace Walgreens on Nasdaq: ‘SMCI has an adjacency with NVDA’ first appeared on The ICD
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