AI Stock Game Palantir Technologies, Inc. PLT was not included in the S&P 500 index in the latest quarterly rebalancing of key S&P indices announced Friday.
What happened: AI Server Manufacturer Super Micro Computer, Inc. SMCI and California-based footwear designer and distributor Deckers Outdoor Corp. DECK will join the S&P 500 index starting March 18, S&P Dow Jones Indices, a division of S&P Global, said in a statement.
Super Micro Computer and Deckers Outdoor will replace Whirlpool Corporation WHR and Zions Bancorporation, National Association ZION, respectively, in the index. The bottom two will take the spots of the top two in the S&P MidCap 400 Index.
The S&P 500 index is considered the best indicator of large-cap US stocks and includes 500 leading companies, covering approximately 80% of the available market capitalization. The S&P 500, a market capitalization-weighted index, is rebalanced quarterly, typically on the third Friday of March, June, September and December.
During rebalancing, companies are typically removed or added, taking into account the most recent share count and float of their component companies and adjusting their weights in their index.
Eligibility criteria for inclusion in the S&P 500 Index are a market capitalization of $15.8 billion or more, an annual dollar value traded at a float-adjusted market capitalization greater than 0.75, a listing on the NYSE or NASDAQ and a primary listing in the US a trading volume criterion as well.
Following the inclusion of Super Micro Computer, CNBC Mad Money host Jim Cramer He said the stock is a “very good short” but “very good.”
See also: How to invest in the S&P 500
Palantir's disappointment: Quite contrary to expectations, this time Palantir was not added to the broader indicator. The company's investors expressed disappointment at its exclusion on social media, although some found a silver lining. One said another three months before the next rebalance would allow time for institutional buildup.
Because it is important: Inclusion in the index is usually positive for stocks, as funds that own portfolios that mirror the index will buy them to maintain the respective weightings of the stocks that comprise it. The stock will also benefit from increased volume and liquidity due to purchases of index funds and ETFs.
Following the announcement, Super Micro Computer and Deckers Outdoor rose 12.54% and 4.40%, respectively, in after-hours trading on Friday, according to Data from Benzinga Pro. Palantir, for its part, fell 3.81%.
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