Alex Karp, CEO of Palantir Technologies, speaks at the World Economic Forum in Davos, Switzerland, January 18, 2023.
Arnd Wiegmann | Reuters
Dingle and Palantir Both jumped about 7% in extended trading Friday after S&P Global announced the companies would join the S&P 500 index.
Software maker Palantir will take its place American Airlinesand Dingle replaces Etsyaccording to a statement. Shares of companies added to the benchmark often rise after the announcement because fund managers who track the index regularly update their portfolios to reflect the additions.
For Dell, the announcement marks a return to the benchmark. The PC and server maker was a founding member from 1996 until 2013, when founder Michael Dell and private equity firm Silver Lake took the company private. Dell went public again in 2018.
Super Micro Computer, which competes with Dell in selling servers for artificial intelligence workloads, joined the S&P 500 earlier this year after a historic stock rally that pushed the company’s market capitalization to $50 billion. Its value has since halved.
After operating as a venture-backed startup for more than 15 years, Palantir went public on the New York Stock Exchange in 2020, and in the fourth quarter of 2022, the company began posting earnings. At second trimesterPalantir’s net income was $135.6 million, up from $27.9 million in the same period last year. Annual revenue growth accelerated for four consecutive quarters.
Palantir co-founder and CEO Alex Karp has built a reputation for promoting patriotism in technology by helping government and military agencies manage their data. He said recently The New York Times that Palantir is in the business of “finding hidden things.”
To be included in the S&P 500, a company must have reported earnings in the last quarter and have a cumulative profit over the four most recent quarters.
“My interest in profitability is for obvious reasons, but it’s also, I think, just that we’re going to be in a much stronger position as it becomes clear that we qualify for the S&P,” Karp told analysts on a conference call in May 2023. .
Dell has been profitable nearly every quarter since 2019. The stock jumped 90% in 2023 and was up 33% this year before the rebalancing announcement. Growth is due to sales of servers they contain Nvidia GPUs that can handle AI workloads. Dingle he told investors Aug. 29 saw AI server demand of $3.2 billion in the quarter ended Aug. 2, up 23% from the previous quarter.
Cybersecurity vendor CrowdStrike added to the index during the previous rebalancing in June.
The additions better reflect U.S. large-cap stocks, S&P Global said. The median market capitalization of index companies is approximately $33.5 billion. Palantir has a market value of over $67 billion, while Dell is valued at over $72 billion.
Shares of another software maker, Workday, fell 2% after hours. In an email sent early Friday, Bank of America’s trading desk named Workday among the top candidates for S&P inclusion, along with Palantir.
— CNBC’s Ari Levy contributed to this report.
