Palantir inventory’s big rise this 12 months has earned it a spot on one other inventory index.
Palantir Technologies (PLTR 3.92%) inventory buyers obtained some excellent news to start out their weekends. On Friday at 8 p.m. ET, Nasdaq (NDAQ -0.93%) introduced that the substitute intelligence (AI)-powered software program firm is being added to the Nasdaq-100 index.
This transfer by Nasdaq — which owns and operates its namesake inventory trade and others — is a part of its annual reconstitution of the Nasdaq-100 index, which includes 100 of the most important non-financial firms listed on the Nasdaq Stock Market.
In 2024, Palantir inventory has soared 343% by means of Dec. 13 versus the S&P 500‘s 29% return. So, it is simple to know how an enormous, roughly corresponding enhance in Palantir’s market cap has landed it a spot on the Nasdaq-100.
The timing of the information launch was strategic, as 8 p.m. ET is when after-hours inventory buying and selling ends within the United States. I believe Palantir inventory would have gotten a lift had this information been launched throughout both common or after-hours buying and selling.
What shares are being added and faraway from the Nasdaq-100?
Along with Palantir, the shares being added to the Nasdaq-100, launched in 1985, are MicroTechnique and Axon Enterprise.
Palantir is a software-as-a-service (SaaS) firm that gives AI-powered software program over the cloud. Its platforms allow its prospects to make use of their knowledge to extend operational effectiveness and effectivity. Its prospects embody businesses inside the U.S. authorities and people of our allies and industrial prospects.
MicroTechnique operates as an enterprise software program firm, however most buyers probably view it as a play on the value of Bitcoin because the firm plows cash into shopping for the cryptocurrency. As of Dec. 13, 2024, MicroTechnique inventory is up 547%.
Axon sells physique cameras and different services and products to legislation enforcement, the navy, and customers. Through Dec. 13, Axon inventory is up 150% this 12 months.
The three shares being faraway from the Nasdaq-100 are AI server specialist Super Micro Computer (SMCI -3.90%), genomics-focused biotech Illumina, and biotech Moderna, greatest often known as the maker of one of many two mRNA-based COVID-19 vaccines.
Shares of Supermicro are up 28% by means of Dec. 13, 2024, however they’ve plunged 69% since hitting their all-time excessive in March. The inventory’s huge drop is partly because of the weakening of among the firm’s monetary metrics. However, it primarily stems from the fallout following a widely known short-seller’s allegations of accounting manipulations and different objects of concern to buyers. (Short-sellers are those that guess on the value of a inventory declining.)
Illumina inventory has eked out a achieve of 6% up to now this 12 months, whereas Moderna inventory has plummeted 58%, largely on account of a steep fall-off in gross sales of its COVID-19 vaccine.
When does Palantir inventory be part of the Nasdaq-100 Index?
The reconstitution of the Nasdaq-100 index will turn out to be efficient previous to the market open on Monday, Dec. 23.
How does being added to the Nasdaq-100 profit Palantir and its shareholders?
A Nasdaq-100 index membership means mutual funds, exchange-traded funds (ETFs), and different monetary merchandise primarily based on this index must purchase shares of Palantir. This elevated demand ought to exert not less than some upward strain on the inventory worth.
Membership in any well-known inventory index additionally will increase an organization’s visibility. Greater consciousness of Palantir will widen the pool of potential buyers in its inventory.
The excellent news retains rolling in for Palantir inventory buyers
Palantir inventory buyers have had an abundance of fine information not too long ago. Notably, the corporate launched a implausible third-quarter report final month, which despatched shares hovering greater than 24% the following day.
In the third quarter, Palantir’s year-over-year income and adjusted earnings per share (EPS) surged 30% and 43%, respectively. Both outcomes beat Wall Street’s estimates. Moreover, administration elevated full-year 2024 steering for income, adjusted working revenue, and adjusted free money circulate.
Beth McKenna has no place in any of the shares talked about. The Motley Fool has positions in and recommends Axon Enterprise, Bitcoin, and Palantir Technologies. The Motley Fool recommends Illumina, Moderna, and Nasdaq. The Motley Fool has a disclosure coverage.
