Nvidia Corp could soon be dethroned as the best-performing stock in the S&P 500 by another artificial intelligence (AI)-linked firm with staggering returns in the past year.
Shares of Super Micro Computer Inc on Monday jumped 19 percent to close at an all-time high of US$1,074.34 a share following news that the company is set to be added to the S&P 500 Index later this month. The move extended gains for the server and software provider to nearly 1,000 percent in the past 12 months, dwarfing Nvidia’s 257 percent rally during the same period.
The gain this year alone has added about US$44 billion to Super Micro’s market capitalization, pushing its total value to about US$60 billion.
Photo: Ann Wang, Reuters
“It makes sense for it to be included in the S&P,” Banrion Capital Management LLC chief executive officer Shana Sisely said. “It could actually drive the S&P higher, because now you have a name other than Nvidia that will be driving returns.”
Super Micro’s addition to the S&P 500 Index means that the benchmark will have even more AI representation outside of the top technology companies that have led the broader market higher this year.
The San Jose, California-based company’s surge received an additional boost in January when it reported preliminary results that exceeded Wall Street expectations and signaled strong demand for AI.
To be sure, Super Micro has experienced some volatility in the past few weeks and while stocks generally leap on news that they are joining the S&P 500 Index, gains are usually muted once they have been added, Sisely said.
“For people who think this means that all of a sudden this pushes Super Micro Computer up even more, I’d temper that,” she said.
“Following the completion of the inclusion, you usually see the stock sell off a little bit,” she added.
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