Palantir Replaces Super Micro in Nasdaq-100 Index

Palantir Technologies (PLTR, Financial) is ready to replace Super Micro Computer (NASDAQ: SMCI) in the Nasdaq 100 index, starting before the market opens on December 23. This is part of the index's annual reconstitution, which ensures the Nasdaq's best 100 nonfinancial companies are accurately reflected.

The company's stock has surged more than 204% this year, helping to drive it up into the index, where analysts expect it will gain further visibility. Palantir, MicroStrategy (MSTR, Financial), and Axon Enterprise (AXON, Financial) will also be joining the index. In the last six months, Axon's 117% gain came as its public safety technologies became increasingly sought after, and at the same time, MicroStrategy gained 171%, driven in part by its Bitcoin holdings.

Meanwhile, Super Micro's market value has tumbled 59 percent over the past six months as it battles financial woes, including the threat of Nasdaq delisting for accounting fraud. The index will see the removal of Moderna (MRNA, Financial) stocks, whose stock has fallen by about 70% after declining demand for COVID-19 vaccines, and Illumina (ILMN, Financial).

Acquisitions of Palantir, MicroStrategy, and Axon in the NDX are likely to result in higher demand for their shares, as financial products following the index will have to buy shares.

This article first appeared on GuruFocus.