Shares of data analytics software company Palantir Technologies, Inc. (PLTR) declined in premarket trading on Monday, while AI-server manufacturer Super Micro Computer, Inc. (SMCI) surged. This divergent movement stems from the contrasting outcomes of these two companies in the latest quarterly rebalancing of key S&P indices, announced on Friday.
To the disappointment of Palantir investors, S&P Dow Jones Indices, a division of S&P Global, excluded Palantir from the S&P 500 Index but included Super Micro Computer and footwear designer and distributor Deckers Outdoor Corp. (DECK). The changes will take effect on March 18.
Inclusion in the S&P 500 typically benefits stocks as index funds holding portfolios that mirror the index are obligated to buy them to maintain the weightings of the constituent stocks. Additionally, the increased trading volume and liquidity due to purchases by index funds and ETFs further bolster the stock’s value.
Reflecting these factors, Palantir’s premarket price dropped 4.13% to $23.90, while Super Micro Computer jumped 11.87% to $1,012.99, according to Benzinga Pro data.
Investors and analysts will be closely watching how these changes impact the stock prices of Palantir and Super Micro Computer in the coming days and weeks. For Palantir, missing out on a spot in the prestigious S&P 500 Index may lead to short-term selling pressure, but the long-term prospects of the company will ultimately determine its performance in the market.
On the other hand, Super Micro Computer’s inclusion in the index could lead to increased investor interest and demand for the stock, driving up its price in the near future. This development highlights the importance of index inclusions and exclusions for publicly traded companies and the impact it can have on their stock prices.
Overall, the latest quarterly rebalancing of key S&P indices has had a notable impact on the stock prices of Palantir and Super Micro Computer. Investors will be monitoring these companies closely to see how they navigate these changes and what the future holds for their respective stock prices.
