Shares of Dell and Palantir rose about 7% in extended trading Friday after announcing their addition to the S&P 500. Software developer Palantir will replace American Airlines in the S&P 500, S&P Dow Jones Indices said, and Dell will replace the e-commerce site. Etsy commerce.
Image Source: Tyler Prahm/unsplash.com
The S&P 500 stock index consists of 503 stocks of the 500 publicly traded companies with the largest capitalizations traded on US stock exchanges. Often, shares of companies added to the index rise after the announcement, as fund managers that track the index seek to regularly update their portfolios to reflect changes in the S&P 500.
For computer maker Dell, this marks a return to the index, which the company was on from 1996 to 2013, after which founder Michael Dell and private equity firm Silver Lake took it private. Then, in 2018, Dell became a public company again. Dell’s rival in the server market for AI workloads, Supermicro was added to the S&P 500 earlier this year after its market capitalization topped $50 billion. Since then, Supermicro’s market value has fallen by half.
After more than 15 years as a venture-backed startup, Palantir listed on the New York Stock Exchange in 2020 and began reporting earnings in the fourth quarter of 2022. In the second quarter, Palantir’s net income was $135.6 million, which is significantly higher than the $27.9 million profit a year earlier.
The addition of Dell and Palantir to the index better reflects large market-cap U.S. stocks, S&P Global said. The median market capitalization of companies in the index is about $33.5 billion. Palantir’s market capitalization is more than $67 billion, and Dell is now valued at more than $72 billion.