Super Micro Computer Faces Uncertain Future on Nasdaq 100: Will xAI and Nvidia Provide Support?

Super Micro Computer Inc. (SMCI) is in a precarious position this week, as its presence on the Nasdaq 100 Index is at risk.

Each December, the Nasdaq 100 makes adjustments to its lineup, and the San Jose-based company is among those potentially facing removal, along with other struggling stocks like Moderna Inc (MRNA) and Biogen Inc (BIIB).

At one time, Super Micro Computer thrived due to the rising demand for artificial intelligence infrastructure, boasting a market capitalization of $67 billion. However, following a recent auditing controversy, its market cap has sharply decreased to just below $20.4 billion.

Although Ernst & Young identified governance concerns that raised alarm among investors, a subsequent investigation by a special committee found insufficient evidence to support these claims.

During the Reuters NEXT conference, CEO Charles Liang reassured stakeholders that the company intends to meet its financial filing deadlines and is aiming for a resolution by February.

Liang highlighted Super Micro's strong partnerships with influential clients, including xAI and Nvidia Corp (NVDA), which may play a role in stabilizing the company’s outlook.

Stock Performance Indicators

However, the technical indicators present a mixed picture.

Chart generated using Benzinga Pro

Currently priced at $37.95, Super Micro Computer’s stock is trading below its eight-day simple moving average (SMA) of $41.47, suggesting some short-term selling pressure. On the other hand, its 20-day SMA of $33.38 and 50-day SMA of $37.10 point to some medium-term strength, offering a potential silver lining for investors.

Long-term trends, nevertheless, appear bleak, with a 200-day SMA at $67.21 that serves as a reminder of how far the stock has fallen.

Insights from Analysts

Despite the prevailing market skepticism, analysts at JPMorgan express a more optimistic view regarding Super Micro's order stability and customer retention. They report strong orders with no significant issues among its customer base.

The pending launch of Nvidia's upcoming Blackwell product line in late fiscal 2025 might also enhance Super Micro’s role in the AI infrastructure space.

The Path Ahead

As Super Micro holds onto the hope of securing its place in the Nasdaq 100, the upcoming decision could significantly depend on its market valuation compared to stronger contenders like Palantir Technologies Inc (PLTR) and MicroStrategy Inc (MSTR). The countdown is on for SMCI to demonstrate that it should remain among the technology sector’s leading firms.

Mark your calendars—this Friday, the 13th, could be a pivotal moment for this beleaguered player in AI infrastructure.

Super, Micro, Nasdaq