Palantir's Shares Gain Entry into the Nasdaq-100 Index while Super Micro Computer Gets Removed: Crucial Information for Investors
Palantir Technologies (PLTR shedding -3.72%) stock investors got some delightful news to kick off their weekends. On a Friday at 8 p.m. ET, Nasdaq (NDAQ losing -0.89%) declared that the AI-driven software company would be integrated into the Nasdaq-100 index.
This decision by Nasdaq, which manages and operates its namesake stock exchange along with others, is part of its yearly reconstitution of the Nasdaq-100 index. This index comprises 100 of the largest non-financial companies listed on the Nasdaq Stock Market.
Through Dec. 13, 2024, Palantir stock has skyrocketed 343%, while the S&P 500 only delivered a 29% return. Therefore, it's not difficult to comprehend why a significant increase in Palantir's market cap has propelled it to join the Nasdaq-100.
The timing of the announcement was calculated, as 8 p.m. ET is when after-hours stock trading concludes in the United States. I presume Palantir stock could have gotten a boost had this news been disclosed during regular or after-hours trading.
Which stocks are entering and departing the Nasdaq-100?
Alongside Palantir, the following stocks will be accepting a place in the Nasdaq-100, launched in 1985: MicroStrategy and Axon Enterprise.
Palantir is a SaaS (Software as a Service) company specializing in AI-powered software delivered over the cloud. Its platforms enable its customers to optimize their operations and efficiency by utilizing their data. Its clientele includes various U.S. government agencies, foreign allies, and commercial corporations.
MicroStrategy operates under the umbrella of enterprise software, but investors typically consider it a Bitcoin play due to the company's practice of purchasing the cryptocurrency. As of Dec. 13, 2024, MicroStrategy stock has escalated 547%.
Axon sells body cameras and related products and services to law enforcement, the military, and consumers. By Dec. 13, 2024, Axon stock has soared 150% this year.
The three stocks being excised from the Nasdaq-100 include AI server expert Super Micro Computer (SMCI shedding -5.22%), genomics-focused biotech Illumina, and biotech Moderna, best-known for creating one of the two mRNA-based COVID-19 vaccines.
By Dec. 13, 2024, Supermicro shares have climbed 28%, but they have nosedived 69% since reaching their all-time high in March. The stock's plunge primarily stems from the weakening of several of the company's financial metrics. However, it largely owes to the aftermath of a famed short-seller's allegations of accounting manipulations and other investor concerns.
Illumina stock has only managed a 6% gain so far in 2024, while Moderna stock has plummeted 58%, primarily due to a sharp decrease in sales of its COVID-19 vaccine.
When will Palantir stock join the Nasdaq-100 Index?
The reconstitution of the Nasdaq-100 index will take effect before the market opens on Monday, Dec. 23.
How does being added to the Nasdaq-100 favor Palantir and its investors?
Palantir's inclusion into the Nasdaq-100 index means that mutual funds, ETFs, and other financial instruments based on this index must purchase Palantir shares. This increased demand should, at the very least, exert some upwards pressure on the stock price.
Membership in any well-known stock index also multiplies a company's visibility. Greater awareness of Palantir equates to a broader pool of potential investors in the stock.
Palantir stock investors bask in continual good fortune
Palantir stock investors have been inundated with positive news recently. One of the most notable events was when the company unveiled an impressive third-quarter report last month, which elevated shares by more than 24% the day following.
In the third quarter, Palantir's year-over-year revenue and EPS (Earnings per Share) escalated by 30% and 43%, respectively. Both figures outshined Wall Street’s estimations. Additionally, management boosted its full-year 2024 revenue, adjusted operating profit, and free cash flow guidance.
This increased visibility from being in the Nasdaq-100 could potentially attract more investors, leading to further finance opportunities for Palantir. With its addition, investing in Palantir might become more accessible for a wider range of individuals through various investment vehicles.
As Palantir joins the Nasdaq-100, the influx of institutional money could further boost its financial position, allowing it to invest in research and development, thereby enhancing its AI-driven software offerings.
