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Super Micro to Join S&P 500, Shares Rally: ETFs to Buy
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One of the hottest trades - Super Micro Computer (SMCI - Free Report) – is set to enter the S&P 500 Index on quarterly rebalance, replacing Whirlpool. The move came on the back of its historic rally as the stock soared more than twentyfold over the past two years and over 200% just since the start of 2024. Super Micro jumped 19% to a new all-time high following the news, propelling its market cap to $60 billion (read: Time to Buy Super Micro (SMCI - Free Report) Heavy ETFs as It Joins S&P 500?).
Super Micro’s inclusion in the S&P 500 is good news for its shareholders as well as the stock. It will attract new investors to the company, who would indirectly purchase the company through financial products invested in the S&P 500. Given this, investors could tap the opportune moment with the help of the ETFs having a substantial allocation to this server maker. These include iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT - Free Report) , Invesco S&P MidCap Momentum ETF (XMMO - Free Report) , and Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) .
Solid Growth Prospects
The addition in the S&P 500 will fuel substantial growth in the Super Micro as money managers are on the hunt for other companies that are capitalizing on the AI boom after bellwether Nvidia's (NVDA - Free Report) stunning rally, which made it the third most valuable U.S. company (read: Nvidia Drives AI and Semiconductor Stocks: ETFs to Gain).
Super Micro's success can be largely attributed to the ongoing artificial intelligence (AI) boom within the technology sector. As a leading provider of servers and computer infrastructure essential for AI developments, Super Micro has become a key player in supporting the deployment and training of AI models, especially those based on Nvidia technology.
The stock also got a boost from its robust earnings reported in late January. Super Micro has demonstrated impressive performance, with its revenue doubling to $3.66 billion in the quarter ended December. Market analysts project that the company's sales will more than triple in the current quarter. Such optimistic forecasts are bolstered by Super Micro's strategic partnerships and its ability to tailor server solutions to meet the specific needs of its customers, further establishing its prominence in the rapidly evolving AI landscape.
Analysts are Bullish
Wall Street is bullish on the stock. Super Micro currently has an average brokerage recommendation (ABR) of 1.89 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by nine brokerage firms. The current ABR compares to an ABR of 1.86 a month ago based on seven recommendations.
Of the nine recommendations deriving the current ABR, six are Strong Buy, representing 66.67% of all recommendations.
Based on short-term price targets offered by eight analysts, the average price target for Super Micro Computer comes to $717.38. The forecasts range from a low of $250.00 to a high of $1,300.00.
Solid Earnings Estimate Revisions
Super Micro saw a positive earnings estimate revision of a penny over the past month for the fiscal year (ending June 2024), with an estimated earnings growth of 83.8%. This compares favorably with the industry’s growth projection of 14.29%.
SMCI has a Zacks Rank #1 (Strong Buy) and belongs to a top-ranked Zacks industry (top 6%), suggesting good tidings for the stock.
ETFs to Buy
iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT - Free Report)
iShares U.S. Digital Infrastructure and Real Estate ETF offers exposure to U.S.-listed companies involved in the storage, processing, transmission and/or access of digital data and services. It follows the S&P Data Center, Tower REIT and Communications Equipment Index and holds 28 stocks in its basket, with Super Micro occupying the top position at 11.5% share.
iShares U.S. Digital Infrastructure and Real Estate ETF has accumulated $46 million in its asset base and charges 41 bps in annual fees. It has a Zacks ETF Rank #1.
Invesco S&P MidCap Momentum ETF offers exposure to mid-cap firms having the highest momentum scores by tracking the S&P Midcap 400 Momentum Index. It holds 74 stocks in its basket, with Super Micro taking the top spot at 10.6%. XMMO has key holdings in industrials, consumer discretionary, information technology and financials (read: 5 Top-Ranked ETFs at New Highs Set to Soar Further).
Invesco S&P MidCap Momentum ETF has AUM of $1.6 billion and charges 34 bps in annual fees. It trades in an average daily volume of 184,000 shares and has a Zacks ETF Rank #2 (Buy).
Invesco S&P MidCap 400 Pure Growth ETF follows the S&P MidCap 400 Pure Growth Index, which measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index. It holds 83 stocks in its basket, with Super Micro taking the top spot at 5.9% of the portfolio. It charges 35 bps in annual fees. Consumer discretionary, industrials, information technology and energy are the top four sectors with double-digit allocations each.
Invesco S&P MidCap 400 Pure Growth ETF has amassed $290 million and trades in an average daily volume of 9,000 shares. It has a Zacks ETF Rank #2.
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Super Micro to Join S&P 500, Shares Rally: ETFs to Buy
One of the hottest trades - Super Micro Computer (SMCI - Free Report) – is set to enter the S&P 500 Index on quarterly rebalance, replacing Whirlpool. The move came on the back of its historic rally as the stock soared more than twentyfold over the past two years and over 200% just since the start of 2024. Super Micro jumped 19% to a new all-time high following the news, propelling its market cap to $60 billion (read: Time to Buy Super Micro (SMCI - Free Report) Heavy ETFs as It Joins S&P 500?).
Super Micro’s inclusion in the S&P 500 is good news for its shareholders as well as the stock. It will attract new investors to the company, who would indirectly purchase the company through financial products invested in the S&P 500. Given this, investors could tap the opportune moment with the help of the ETFs having a substantial allocation to this server maker. These include iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT - Free Report) , Invesco S&P MidCap Momentum ETF (XMMO - Free Report) , and Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report) .
Solid Growth Prospects
The addition in the S&P 500 will fuel substantial growth in the Super Micro as money managers are on the hunt for other companies that are capitalizing on the AI boom after bellwether Nvidia's (NVDA - Free Report) stunning rally, which made it the third most valuable U.S. company (read: Nvidia Drives AI and Semiconductor Stocks: ETFs to Gain).
Super Micro's success can be largely attributed to the ongoing artificial intelligence (AI) boom within the technology sector. As a leading provider of servers and computer infrastructure essential for AI developments, Super Micro has become a key player in supporting the deployment and training of AI models, especially those based on Nvidia technology.
The stock also got a boost from its robust earnings reported in late January. Super Micro has demonstrated impressive performance, with its revenue doubling to $3.66 billion in the quarter ended December. Market analysts project that the company's sales will more than triple in the current quarter. Such optimistic forecasts are bolstered by Super Micro's strategic partnerships and its ability to tailor server solutions to meet the specific needs of its customers, further establishing its prominence in the rapidly evolving AI landscape.
Analysts are Bullish
Wall Street is bullish on the stock. Super Micro currently has an average brokerage recommendation (ABR) of 1.89 on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell etc.) made by nine brokerage firms. The current ABR compares to an ABR of 1.86 a month ago based on seven recommendations.
Of the nine recommendations deriving the current ABR, six are Strong Buy, representing 66.67% of all recommendations.
Based on short-term price targets offered by eight analysts, the average price target for Super Micro Computer comes to $717.38. The forecasts range from a low of $250.00 to a high of $1,300.00.
Solid Earnings Estimate Revisions
Super Micro saw a positive earnings estimate revision of a penny over the past month for the fiscal year (ending June 2024), with an estimated earnings growth of 83.8%. This compares favorably with the industry’s growth projection of 14.29%.
SMCI has a Zacks Rank #1 (Strong Buy) and belongs to a top-ranked Zacks industry (top 6%), suggesting good tidings for the stock.
ETFs to Buy
iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT - Free Report)
iShares U.S. Digital Infrastructure and Real Estate ETF offers exposure to U.S.-listed companies involved in the storage, processing, transmission and/or access of digital data and services. It follows the S&P Data Center, Tower REIT and Communications Equipment Index and holds 28 stocks in its basket, with Super Micro occupying the top position at 11.5% share.
iShares U.S. Digital Infrastructure and Real Estate ETF has accumulated $46 million in its asset base and charges 41 bps in annual fees. It has a Zacks ETF Rank #1.
Invesco S&P MidCap Momentum ETF (XMMO - Free Report)
Invesco S&P MidCap Momentum ETF offers exposure to mid-cap firms having the highest momentum scores by tracking the S&P Midcap 400 Momentum Index. It holds 74 stocks in its basket, with Super Micro taking the top spot at 10.6%. XMMO has key holdings in industrials, consumer discretionary, information technology and financials (read: 5 Top-Ranked ETFs at New Highs Set to Soar Further).
Invesco S&P MidCap Momentum ETF has AUM of $1.6 billion and charges 34 bps in annual fees. It trades in an average daily volume of 184,000 shares and has a Zacks ETF Rank #2 (Buy).
Invesco S&P MidCap 400 Pure Growth ETF (RFG - Free Report)
Invesco S&P MidCap 400 Pure Growth ETF follows the S&P MidCap 400 Pure Growth Index, which measures the performance of securities that exhibit strong growth characteristics in the S&P MidCap 400 Index. It holds 83 stocks in its basket, with Super Micro taking the top spot at 5.9% of the portfolio. It charges 35 bps in annual fees. Consumer discretionary, industrials, information technology and energy are the top four sectors with double-digit allocations each.
Invesco S&P MidCap 400 Pure Growth ETF has amassed $290 million and trades in an average daily volume of 9,000 shares. It has a Zacks ETF Rank #2.