With just two months into the year, it has already been an odd-defying one for artificial intelligence (AI)-related stocks. Making this a moot point was Super Micro Computer (NASDAQ: SMCI), which rallied above $1,000 yesterday, March 4, 2024.
As the server and computer infrastructure company continues its relentless rise, it experienced a price jump of $168.86 (18.65%) on Monday, with its current price now standing at $1,075.
SMCI Stock Price Chart. Source: TradingView
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Yesterday’s surge comes after the technology giant had initially struggled to jump over the $1,000 hurdle again after surpassing it on February 15, 2024. As Finbold reported, even OpenAI’s flagship artificial intelligence platform – ChatGPT tentatively stated that another jump was more likely during the second portion of 2024.
The question is – what led to SMCI’s stock rallying over $1,000 on Monday?
SMCI joining the S&P 500
After the market closed on Friday, it was announced that SMCI would be joining the Standard & Poor’s 500 Index (S&P 500). The company will be replacing Whirlpool Corp, a US-based home appliances company when the market opens on March 18.
In order to claim the coveted S&P 500 spot a company must be both based in the US and have a market cap of at least $8.2 billion.
When stocks are added to the benchmark index, they frequently rally as funds and institutional investors are compelled to purchase shares. Nevertheless, this rally typically diminishes once the buying related to the benchmark inclusion concludes.
The Nvidia connection
While the stock surge on Monday relates to the S&P 500 announcement, SMCI’s continuous rise over the last few months can also be attributed to its frequent collaborator, Nvidia (NASDAQ: NVDA) as well.
In the wake of Nvidia’s stock experiencing a significant surge, SMCI has also seen its shares climb, a phenomenon attributed to the optimistic outlook on the tech sector and expected gains from their close technological and supply chain interconnections.
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