Palantir Technologies saw its stock soar by 14%, marking its highest price since early 2021.
The Monday surge followed the announcement made late Friday that the data analytics company will be added to the S&P 500 index. Palantir, along with Dell Technologies, is set to replace American Airlines and Etsy in the index, as reported by S&P Global.
It is common for shares of companies added to the S&P 500 to rally, as fund managers who track the index adjust their portfolios to reflect the new additions. In addition to Palantir’s 14% increase, Dell’s shares rose nearly 4% on the same day.
To qualify for inclusion in the S&P 500, a company must show profitability in its latest quarter and across its last four quarters combined. Palantir reported a net income of $135.6 million in its second quarter, a significant rise from $27.9 million the previous year, after becoming profitable in late 2022.
Tech companies have been gaining more prominence within the S&P 500, reflecting the sector’s growing influence on the broader economy. In recent months, cybersecurity firm CrowdStrike and Super Micro Computer have also joined the index.
Palantir, founded in 2003, provides data analysis software to both government agencies and commercial enterprises. Its rise in value—currently boasting a market cap exceeding $76 billion—has been fueled by increasing demand for artificial intelligence-related technologies. Palantir’s stock closed at $34.60 on Monday, coming close to its peak of $39 in early 2021.
Despite its rapid growth, Palantir has faced controversies, including criticism over its work with US immigration authorities and other governmental agencies.
CNBC, Market Watch, and The Street contributed to this report.
