Super Micro Computer (SMCI) will replace the retail pharmacy giant Walgreens Boots Alliance (WBA) in the Nasdaq 100 index (NDX), effective July 22. Importantly, this inclusion will place SMCI among the most valuable non-financial companies in the Nasdaq 100.
Supermicro is an information technology company that provides server and storage solutions. For a thorough assessment of the stock, go to TipRanks’ Stock Analysis page.
Here’s What Led to This Change
The reason for Walgreens’ exclusion from the index is its sharp decline in market value. In 2024 so far, WBA stock declined by 54.8%, resulting in a market cap drop to around $10 billion. Currently, the company’s market cap represents 0.05% of the Nasdaq 100’s total value.
As a reminder, the NDX tracks the 100 largest non-financial companies listed on the Nasdaq exchange. To remain included in the index, companies must have at least 0.1% of the index’s total market value, which is over $20 trillion. WBA didn’t meet this requirement, so it was removed from the index.
Meanwhile, Super Micro has had a stellar year, with its stock price surging over 220% and its market valuation crossing $50 billion. This increase in value pushes Supermicro into the Nasdaq 100 index, solidifying its position as a major player in the technology sector.
Is SMCI a Good Stock to Buy?
SMCI is well-poised to capitalize on the surging demand, thanks to its strategic collaborations with industry leaders like Nvidia (NVDA), Intel (INTC), and AMD (AMD). Furthermore, Supermicro’s expertise in providing liquid cooling technology helps address challenges associated with high-performance AI systems.
However, given the significant increase in SMCI stock, Wall Street analysts are cautiously optimistic about its prospects. The stock has a Moderate Buy consensus rating based on five Buys and four Hold recommendations. Analysts’ average price target on Supermicro stock is $1,051.11, which implies 15.5% upside potential from current levels.
