Palantir Shares Join Nasdaq 100 Index, Super Micro Computer Launches: What Investors Should Know

Palantir Technologies (PLTR 3.92%) stock investors got some good news to start their weekends. Friday at 20 ET, Nasdaq (NDAQ -0.93%) announced the addition of the artificial intelligence (AI)-powered software company Nasdaq-100 index.

The move by Nasdaq — which owns and operates its namesake exchange and others — is part of its annual reconstitution of the Nasdaq 100 index, which includes 100 of the largest non-financial companies listed on the Nasdaq exchange.

In 2024, Palantir stock is up 343% through December 13 from S&P 500‘s 29% return. So it’s easy to understand how a huge, roughly commensurate increase in Palantir’s market capitalization has earned it a spot on the Nasdaq-100.

The timing of the press release was strategic, as 8 PM ET is when after-hours stock trading ends in the US. I suspect Palantir stock would have received a boost had this news been released during either regular or after-hours trading.

Which stocks are added and removed from the Nasdaq-100?

Along with Palantir, the stocks added to the Nasdaq-100 launched in 1985, Micro strategy and Axon Enterprise.

Palantir is a software-as-a-service (SaaS) company that delivers AI-powered software over the cloud. Its platforms enable customers to use their data to increase operational efficiency and effectiveness. Its customers include agencies within the US government and at our allied and commercial customers.

MicroStrategy operates as an enterprise software company, but most investors probably see it as a play on price Bitcoin since the company plows money into buying the cryptocurrency. Per As of December 13, 2024, MicroStrategy stock is up 547%.

Axon sells body cameras and other products and services to law enforcement, the military and consumers. Through December 13, Axon stock is up 150% this year.

The three stocks being removed from the Nasdaq-100 are AI server specialists Super micro computer (SMCI -3.90%)genomics-focused biotech Illuminaand biotech Modernbest known as the maker of one of the two mRNA-based COVID-19 vaccines.

Shares in Supermicro are up 28% through December 13, 2024, but have fallen 69% since hitting their all-time high in March. The share’s big fall is due, among other things, to the weakening of some of the company’s financial metrics. However, it mainly stems from the fallout from a well-known short seller’s allegations of accounting manipulation and other things that worry investors. (Short sellers are those who bet that the price of a stock will fall.)

Illumina shares have gained 6% so far this year, while Moderna shares are down 58%, largely due to a steep decline in sales of their COVID-19 vaccine.

When will Palantir stock join the Nasdaq 100?

The rebuilding of the Nasdaq-100 index will take effect before the market opens on Monday, December 23.

How does being added to the Nasdaq-100 benefit Palantir and its shareholders?

A Nasdaq-100 index membership means that mutual funds, exchange-traded funds (ETFs) and other financial products based on that index must buy shares of Palantir. This increased demand should put at least some upward pressure on the share price.

Membership of any well-known stock index also increases a company’s visibility. Greater awareness of Palantir will expand the pool of potential investors in their stock.

The good news keeps rolling in for Palantir stock investors

Palantir stock investors have had an abundance of good news recently. Notably, the company released a stellar third-quarter report last month, which sent shares soaring more than 24% the next day.

In the third quarter, Palantir’s year-over-year revenue and adjusted earnings per share (EPS) rose 30% and 43%, respectively. Both results beat Wall Street estimates. In addition, management increased full-year expectations to 2024 for revenue, adjusted operating profit and adjusted free cash flow.