Palantir and Dell Join S&P 500 Index Amid AI-Driven Growth

Palantir, Dell Join S&P 500 Index as AI Revenue Boosts Their Shares

Enterprise software firm Palantir and data center server provider Dell are joining the S&P 500 index of stocks, S&P Global said late Friday, while American Airlines and product marketplace Etsy are being removed. Both Palantir and Dell have benefited from the generative artificial intelligence boom. Dell sells servers powered by Nvidia's AI chips and Palantir sells analytics and AI

Palantir and Dell surge as they join S&P 500 in latest index reshuffle

The additions of Palantir and Dell reflect how technology companies, and artificial intelligence-related names in particular, are reshaping the market. Palantir, the data-analysis software company co-founded by billionaire tech investor Peter Thiel, has grown from serving the US intelligence community to working with dozens of government agencies, and more recently expanding its commercial business. Shares of the Denver-based company have risen over 75% this year as investors bet the software and surveillance firm will benefit from growing demand for its AI tools. Shares jumped as much as 8.4% in after-hours trading Friday. The media could not be loaded, either because the server or network failed or because the format is not supported. Dell, the Round Rock, Texas-based company best know for personal computers and monitors, reported better-than-expected revenue last week as a result of an increase in sales of servers built for handling AI workloads. Shares of the hardware giant jumped as much as 8.7% after the bell, while insurance company Erie Indemnity rose as much as 5.5%. Companies must have a market capitalization of at least $18 billion and meet profitability, liquidity and share-float standards to qualify for the S&P 500, per August's methodology. Meanwhile, the removal of American Airlines from the US equity benchmark underscores the challenges the industry has faced of late, including delayed deliveries of planes and rising labor costs. The air carrier slashed its profit outlook in July after expectations for domestic demand proved too rosy. Its shares dropped 0.8% Friday post-market, adding to a 21% year-to-date decline. Inclusion in the US equity benchmark can elevate a company's profile and is becoming more important as passive investment funds grow. Expulsion from the benchmark can weigh on stock prices, as index funds sell shares to realign with the S&P 500's new composition.

Dell and Palantir to join S&P 500; shares of both jump

Dell and Palantir shares both surged in extended trading on Friday after S&P Global announced that the two technology companies would join the S&P 500 U.S. stock index. Palantir will take the place of American Airlines, and Dell is replacing Etsy, according to a statement. This won't be Dell's debut in the index. The computer and server maker was a constituent from 1996 to 2013, as founder Michael Dell and private-equity firm Silver Lake took the company private. Super Micro Computer, which competes with Dell in selling servers for AI workloads, joined the S&P 500 earlier this year following a historic rally in the stock that has pushed the company's market cap past $50 billion. Its value has since been sliced in half. After operating as a venture-backed startup for over a decade, Palantir went public on the New York Stock Exchange in 2020, and in the fourth quarter of 2022, the company started posting profits. In the second quarter, Palantir's net income totaled $135.6 million, up from $27.9 million in the same period a year earlier. Cybersecurity vendor CrowdStrike was added to the index during the previous rebalancing, in June. Shares of companies added to the benchmark often rally after the announcement because fund managers who track the index regularly update their portfolios to mirror the additions. The median market cap of companies in the index is about $33.5 billion. Palantir has a market cap of over $67 billion, while Dell is valued at over $72 billion. -- CNBC's Ari Levy contributed to this report.