Palantir (PLTR) Replaces Super Micro Computer in Nasdaq 100 Shakeup
In a major shakeup of the Nasdaq 100 index (NDX), AI-powered software company Palantir Technologies (PLTR) will replace the high-performance server provider Super Micro Computer (SMCI), effective before the market opens on December 23.
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In addition, MicroStrategy (MSTR), known for its investments in Bitcoin (BTC-USD), and Axon Enterprise (AXON), a provider of law enforcement and public safety technologies, are also set to join the NDX index. Meanwhile, biotechnology companies such as Moderna (MRNA) and Illumina (ILMN) will be removed from the index.
As a reminder, the NDX tracks the 100 largest non-financial companies listed on the Nasdaq Stock Exchange. The above changes are part of the Nasdaq-100 Index’s annual reconstitution, which takes place each December. This process ensures that the NDX reflects the most accurate representation of the companies listed on the Nasdaq exchange.
Here’s What Led to These Changes
SMCI’s exclusion from the index is due to a 59% drop in its market value over the past six months. The company faces financial challenges, including the threat of delisting from the Nasdaq exchange due to delays in filing its annual report. It must be noted that SMCI’s troubles began after Hindenburg Research accused it of accounting fraud in a report issued in August 2024.
Further, Moderna’s stock price has decreased by about 70% in the last six months due to declining demand for COVID-19 vaccines, which has significantly impacted its revenue.
Conversely, Palantir has had a stellar year, with its stock price surging over 204%. This increase in market value boosts its position in the Nasdaq-100 index, highlighting its role as a key player in the tech sector. The company’s focus on AI-powered software solutions and its strong customer base, including government agencies and commercial enterprises, has contributed to its success.
At the same time, MSTR has also seen a 171% gain in six months, largely due to the significant appreciation in the value of its Bitcoin holdings. Moreover, Axon stock has gained 117%, driven by rising demand for its products and services.
What Does Nasdaq 100 Addition Mean for PLTR, MSTR, and AXON?
The inclusion in the Nasdaq 100 index will boost the visibility of Palantir, MicroStrategy, and Axon stocks and potentially increase their share price even further. This is because mutual funds, ETFs, and other financial products tracking the index will be required to purchase shares of these three companies, thereby boosting demand for these stocks.
Which Is the Best Stock to Invest in Now?
Among the above-mentioned stocks, MSTR and AXON have a Strong Buy consensus rating, while ILMN has a Moderate Buy. Meanwhile, PLTR, SMCI, and MRNA have been rated Hold. Looking ahead, analysts expect MRNA, MSTR, and ILMN to see upside potential of 49%, 30%, and 14%, respectively.
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