Dell and Palantir See Stock Surge Following Inclusion in S&P 500
Dell Technologies and Palantir Technologies both experienced a 7% increase in extended trading after S&P Global’s announcement that the two companies would join the S&P 500 index. This move will replace American Airlines and Etsy, respectively.
This marks a return for Dell to the index, having previously been a constituent from 1996 to 2013 before Michael Dell and private-equity firm Silver Lake took the company private. Dell went public again in 2018 and has remained profitable almost every quarter since 2019. Notably, Dell shares have increased by 90% in 2023, driven by strong demand for servers equipped with Nvidia GPUs tailored for AI workloads. The company reported AI server demand of $3.2 billion for the quarter ending August 2, signaling a 23% increase from the previous quarter.
Palantir, which went public on the New York Stock Exchange in 2020, has also shown robust financial growth. After crossing into profitability in late 2022, the company’s net income soared to $135.6 million in Q2 2023, up from $27.9 million the previous year. Known for its data management prowess, Palantir’s CEO Alex Karp has solidified the company’s reputation for “finding hidden things,” a sentiment reinforced in a recent New York Times interview.
Joining the S&P 500, often a precursor to a stock rally, positions both companies among U.S. stocks with substantial market capitalizations—Dell at over $72 billion and Palantir at over $67 billion. These additions reflect S&P Global’s focus on high market cap stocks, with the index’s median market cap standing at approximately $33.5 billion.
Fund managers tracking the index are expected to adjust their portfolios to include Dell and Palantir, further boosting their stock performance. This follows the inclusion of Super Micro Computer and CrowdStrike in previous index rebalancings, demonstrating a trend of high-performing tech companies enhancing the S&P 500’s profile.
Original Story https://www.cnbc.com/2024/09/06/dell-and-palantir-to-join-sp-500-shares-of-both-jump.html
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