Super Micro Computer, Deckers Outdoor make S&P 500 debut

Shares of Super Micro Computer (SMCI) and Deckers Outdoor (DECK) are experiencing a surge as they make their debut in the S&P 500 (^GSPC) index on Monday.

Super Micro Computer will be joining the index's IT sector, riding on an impressive 12-fold growth over the past year, surpassing even Nvidia (NVDA), the S&P 500's top performer.

Meanwhile, Deckers Outdoor — the company behind footwear brands like Hoka and UGG — has also secured its place in the benchmark index. The stock has already delivered a remarkable 36% year-to-date return, outpacing its competitors in the highly competitive footwear market.

Yahoo Finance's Reporter Madison Mills breaks down the details.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video transcript

BRAD SMITH: Plus, we're watching two of the newest members of the S&P 500 make their debut today. Super Micro Computer and Decker shares, they're on the move. And to break down the stocks for us, we've got Yahoo Finance's reporter Madison Mills. Hey, Mady.

MADISON MILLS: Hi, Brad. Thank you so much. So I want to start on Super Micro Computer as you mentioned, because the shares of that company have gone up by 12 fold over the past year. This is a stock that is beating the likes of NVIDIA which is only quadrupled, a measly performance in comparison with SMCI. Once this name gets added to the S&P 500 this morning, it will surely be the top performer for the past year by a mile compared with all other members of the S&P 500.

So a huge deal for SMCI to be added here, that's going to join the IT sector for the S&P. Now just to give some background here, this is a name that began in the cloud growth era focusing on servers and the manufacturing side and delivery that is now fueling a lot of this AI rally. NVIDIA provides the chips, SMCI is the name that's going to be shipping them and manufacturing the servers behind them. So interestingly, both of these companies starting in the exact same year, 1993, and both founders really kind of relying on having this codependent relationship, for lack of a better word on one another.

Interesting to note too that half of SMCI's demand for their servers is driven by this AI boom. So this is a big AI play for those that are looking for it. Another name, though, guys that's being added today a little bit more of a fun one, I might say, is Deckers. They are another big success story when it comes to consumer discretionary. This is a shoe company here. This is the name that is behind the likes of UGG's, Hokas. They are up 36% here year to date.

And really taking a lot of market share away from some of those other big players in the shoe space. When we think about a name like Nike, even a Foot Locker, those names really struggling over the past couple of months, particularly due to that lack of demand coming from consumers out of China. If you take a look at the stock's year to date, you can see that Deckers is really kind of the strong, clear out performer compared with these other two names year to date here.

Now having said that, it's going to be interesting to see whether some other direct to consumer names in this space could be able to take market share away from Deckers. We saw that on On, which is the company behind on cloud sneaker. Was it the New York Stock Exchange on Friday as well? Are they going to take away some of that market share from another direct to consumer sneaker brand? I'm not sure because I still see UGGs every second of every day here in Edinburgh.

SEANA SMITH: We're back, Mady, they're back. I'm one of the UGG wearers, again, although I never really stopped because they're just so comfortable, but--

MADISON MILLS: You rock on this.

SEANA SMITH: Mady, let's talk about the run up that we've seen in the prices of both of these stocks. Because we certainly have seen you mentioned the year to date gains in both Super Micro Computer and also with Decker outdoors. How much of this S&P inclusion has already been priced in from what you're reading from analysts?

MADISON MILLS: I mean, it seems like it has surely, but we are still continuing to get upgrades on these names. Wedbush upgrading Deckers as recently as the 14th. So a couple of days ago here. Still seeing some positive movement when it comes to the analyst notes on both of these stocks. And when you look at SMCI in particular, is there a ceiling for these AI plays? Is a question that I have. I was talking to someone last week who has an $8,000 price target on NVIDIA.

I mean, when you have that price target, the head turn is correct there, Brad.

BRAD SMITH: Yes.

MADISON MILLS: I mean, I don't know if we think that that's accurate, but it is a call. So we talk about it. And if you think about a call that big for the NVIDIA names out there, that's going to have a read through to these other AI plays like an SMCI.

BRAD SMITH: Mady, thanks for breaking these down for us. Man, I might need to give him a feeding some UGGs.

SEANA SMITH: You've never tried them?

BRAD SMITH: No.

SEANA SMITH: You're missing out, Brad. Are you an UGG wear?

MADISON MILLS: I have the fake ones, I don't know.

BRAD SMITH: For UGGs?

MADISON MILLS: But they're soft. I mean, it's good for the dog walk.

SEANA SMITH: Exactly. Maybe try that.

BRAD SMITH: All right. I'm going to try the fake ones first and then I'm going to matriculate to the real ones there, get some real quality Thanks so much, Mady, I appreciate it.