Palantir Technologies (PLTR), MicroStrategy Incorporated (MSTR), and Axon Enterprise (AXON) will be added to the Nasdaq 100 Index effective Monday, December 23, 2024. The three companies will replace Super Micro Computer (SMCI), Moderna (MRNA), and Illumina (ILMN) as part of the index’s annual reconstitution, Nasdaq announced on Friday. This significant shift in the Nasdaq 100 follows a week of milestones, including the index surpassing the 20,000 mark for the first time in history.
Table Content:
The Nasdaq 100 comprises the 100 largest non-financial companies listed on the Nasdaq Composite Index. It undergoes an annual reconstitution in December and quarterly rebalancing to adjust the weighting of its constituents based on market capitalization. This ensures the index accurately reflects the performance of the most significant players in the non-financial sector.
Nasdaq 100 Shakeup Reflects Market Shifts
The inclusion of Palantir, MicroStrategy, and Axon signals a recognition of their growing influence in their respective sectors. Simultaneously, the removal of Moderna, Illumina, and Super Micro highlights the dynamic nature of the market and the shifting fortunes of companies.
:max_bytes(150000):strip_icc()/nasdaq-4662307_final_4x3-7182e5a9961b4a4095140f0133507470.jpg)
The recent surge in technology stocks, fueled by positive inflation data and anticipation of a potential Federal Reserve rate cut, contributed to the Nasdaq 100’s record-breaking week. This optimistic market environment likely played a role in the decision to include companies like Palantir, whose AI offerings have seen increasing demand.
Palantir and MicroStrategy Capitalize on Recent Successes
Palantir’s inclusion follows its strategic move from the New York Stock Exchange to the Nasdaq last month, a prerequisite for joining the Nasdaq 100. The company’s stock has experienced significant growth this year, driven by the burgeoning interest in its artificial intelligence solutions.
MicroStrategy’s addition to the index comes amid a surge in its stock price, largely attributed to the company’s substantial bitcoin holdings and the cryptocurrency’s recent price rally. The renewed interest in bitcoin following Donald Trump’s reelection and his ambition to make the U.S. a global crypto hub has further bolstered MicroStrategy’s position.
:max_bytes(150000):strip_icc()/GettyImages-1182411397-276719035d2749d08e9e3d109f476844.jpg)
Super Micro Computer Faces Delisting Threat
Conversely, Super Micro Computer’s removal from the Nasdaq 100 coincides with the company’s struggles to meet regulatory filing deadlines. Facing a February deadline to submit its delayed annual report, Super Micro risks being delisted from the Nasdaq if it fails to comply.
The company’s stock has endured a tumultuous period, marked by allegations of accounting irregularities and delayed disclosures. Although the stock has rebounded somewhat in recent weeks, it remains significantly below its 2024 highs.
Broader Market Index Adjustments
Beyond the Nasdaq 100, other major market indices have also undergone recent changes. The S&P 500 will welcome Apollo Global Management and Workday later this month, replacing Qorvo and Amentum. Furthermore, Nvidia recently joined the Dow Jones Industrial Average, replacing Intel, while Sherwin-Williams took the place of Dow Chemical. These adjustments underscore the continuous evolution of the market landscape and the importance of index reconstitution in maintaining accurate benchmarks.
Conclusion: Nasdaq 100 Reflects a Dynamic Market
The addition of Palantir, MicroStrategy, and Axon to the Nasdaq 100, along with the removal of Super Micro, Moderna, and Illumina, underscores the dynamic nature of the financial markets. These changes reflect shifting investor sentiment, emerging technologies, and the ongoing competition among companies for market leadership. The Nasdaq 100’s recent milestone of surpassing 20,000 further emphasizes the current strength of the technology sector and sets the stage for continued market activity in the coming months.
