Super Micro Computer (SMCI, Financial) stock fell 7% on Monday after the Nasdaq decided to boot the AI data center company from the prestigious Nasdaq 100 index starting Dec. 23. SMCI shares slid from $34.8 to 33.6 and sank below a major technical support level, plunging by more than 7% in the wake of the news. It is a sharp pivot for the company that, earlier this year, saw its stock surge 20% on the year but remains well off its record $122.90 high reached in March 2024.

• Warning! GuruFocus has detected 5 Warning Signs with SMCI.

Nasdaq 100's rebalancing, which usually brings buyers' momentum into new stocks, is working in the opposite direction here in the wake of ongoing financial reporting difficulties, including the companies' failure to file reports covering its fiscal year ending June 30 and the quarter that ended Sept. 30

In July, NASDAQ's SMCI addition to the Nasdaq 100 had been heralded as a watershed for the AI-driven company, signifying great investor confidence that it could deliver on growth dreams. But the turmoil in recent months caused concern over the firm's accounting practices and market ills it has struggled to overcome. If these financial uncertainties, or the impact of AI adoption, should not be resolved, Supermicro's future market performance may be reliant on the company's server and storage solutions.