Alex Karp, CEO of Palantir Technologies, speaks at the World Economic Forum in Davos, Switzerland, January 18, 2023.
Arnd Wegman | Reuters
Dell and Palantir Shares of the two technology companies rose about 7% in extended trading Friday after S&P Global announced that the two tech companies would join the S&P 500 index of U.S. stocks.
Palantir will replace American Airlinesand Dell It replaces Etsy, according to a statement.
This wouldn’t be the first time Dell has joined the index. The computer and server maker was a constituent of the index from 1996 to 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 AI workloads, joined the S&P 500 earlier this year after a record-breaking surge in its stock that pushed the company’s market value above $50 billion. Since then, its value has fallen by half.
After operating as a venture capital-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 turning a profit. In the second quarter, Palantir’s net income was $135.6 million, up from $27.9 million in the same period the year before. Revenue growth accelerated year-over-year for the fourth consecutive quarter.
Palantir CEO Alex Karp has gained notoriety for helping companies and governments manage their data. He recently told the New York Times that Palantir is “looking for hidden things.”
Dell has been profitable in nearly every quarter since 2019. Dell shares have jumped 90% in 2023, and were up 33% before the rebalancing announcement. Investors are excited about the growth in server sales that include Nvidia Graphics processing units that can handle AI workloads. Dell told investors last week that it saw $3.2 billion in demand for AI servers in the quarter ended Aug. 2, up 23% from the previous quarter.
cyber security vendor Crowd Strike It was added to the index during the previous rebalancing exercise in June.
Shares of companies added to the benchmark index often rise after the announcement because fund managers who track the index regularly update their portfolios to reflect the additions.
S&P Global said the additions better reflect large-cap U.S. stocks. The average market capitalization of companies in the index is about $33.5 billion. Palantir has a market cap of more than $67 billion, while Dell is valued at more than $72 billion.
— CNBC's Ari Levy contributed to this report.
