Assalamu Alaikum,
I would like your advice regarding my investment in the stock SMCI (Super Micro Computer Inc.).
I invested in this company 1 year back because, at the time of purchase, it was classified as Shariah-compliant by the applications and screening services I checked. The company’s business itself appears to be permissible, as it mainly provides AI and data center infrastructure and is not involved directly in haram industries such as alcohol, gambling, interest-based banking, or similar activities.
However, recently the Shariah status changed on the investment application I use in Saudi Arabia (Sahm). About two weeks ago, the app updated the stock from compliant to “non-compliant” and mentioned purification per share.
At the same time:
Zoya now also say not halal yesterday
The issue is the AAOIFI financial screen. Latest Q3 numbers show around $8.8B debt, and current market cap is around $23.26B, so debt/market cap is about 37.8%. That is 7.8 percentage points above the 30% AAOIFI limit.
My situation is the following:
I originally bought the stock around $62.
The stock later crashed to around $19.
Since then, I have continued holding and waiting for recovery and doing dollar cost averaging to reduce cost.
While it was still considered halal, the stock recovered to around $28.
After Sahm and ZOYA changed the status to non-compliant, the stock increased further to around $33.
My unrealized loss is still significant overall, and I have not yet recovered my original capital.
I am confused and worried about the Islamic ruling in this situation.
My questions are:
If a stock was Shariah-compliant when purchased, then later becomes non-compliant due to financial ratio changes, what should the investor do?
Is it permissible to continue holding temporarily until reaching break-even to avoid a major loss?
If I eventually sell at break-even or with some profit, can the impure portion simply be purified according to the purification amount provided by the screening apps?
Is the increase in value during the “non-compliant period” considered entirely haram, or only the impure percentage identified for purification?
If a stock becomes non-compliant temporarily and later returns to compliance, is immediate selling always required?
Should an investor sell immediately even at a heavy loss, or is there scholarly allowance to wait for a reasonable exit while purifying any impure income?
In my case specifically, should I:
exit immediately,
wait until break-even,
or continue holding while purifying the impure portion?
Or wait till I can get some profit and purify based on number of stocks or percentage of profit?
I genuinely want to avoid haram income and act correctly according to Shariah. I am willing to purify any doubtful amount and even exit the investment if necessary at a big loss , but I want to understand the proper Islamic approach rather than acting emotionally or out of fear.
Jazakum Allahu khairan.