On December 13th local time, Nasdaq announced the annual adjustment results of the Nasdaq 100 index, including Palantir, Micro Strategy, and Axon, which will be included in the Nasdaq 100 index, Illumina、 Supermicro computers and Moderna will be removed from this index. The adjustment will take effect before the market opens on December 23rd.
Why adjust?
It is understood that the Nasdaq 100 Index includes the 100 largest non-financial companies listed on NASDAQ and serves as a benchmark for various financial products. Every December, Nasdaq adjusts the constituent stocks of the index. In January 1985, Nasdaq launched this index, along with the Nasdaq Financial 100 Index.
According to the adjustment announcement, the three companies that will be included in the index are all technology enterprises. This adjustment will enhance the representativeness of the index for important technology and innovation sectors. In addition, the adjustment of the constituent stocks of the Nasdaq 100 Index supports Nasdaq's position as a leading global technology company, providing enhanced benchmark capabilities for various financial products. The announcement also stated that newly included companies in the index usually gain higher visibility and investor attention, which may improve their market performance.
However, the announcement did not mention the specific criteria for adjusting the constituent stocks of the index.
The Nasdaq 100 Index has performed well this year. As of December 14th, this year's increase has reached 29.44%, surpassing major indexes such as the Nasdaq, S&P 500, and Dow Jones Industrial Average.
Nasdaq 100 Index Performance for the Year
Three companies attract attention
The three companies included in the index in this adjustment are all rapidly growing enterprises. Among them, Palantir is the most eye-catching. The company was registered and established in Delaware on May 6, 2003, mainly using the Palantir Gotham and Palantir Foundry software platforms as the central operating system for its customers. The company has started developing software for US intelligence agencies to assist in counter-terrorism investigations and operations. The company later began collaborating with commercial enterprises.
The company has seen a huge increase this year. Starting from $17 at the beginning of the year, the stock price has risen to $76.07, with a staggering increase of 343%.
The inclusion of Micro Strategy in the Nasdaq 100 index has been highly controversial. The company's stock price has risen by as much as 500% this year. It is worth noting that the company is accelerating an unconventional plan to raise funds for purchasing and holding more Bitcoin. In the past five weeks, the company has announced every Monday that it will spend billions of dollars to acquire Bitcoin.
With the price of Bitcoin breaking through $100000 and reaching a new historical high, Micro Strategy currently holds over $40 billion worth of Bitcoin. But its basic business incurred a net loss of $340 million in the third quarter of this year. Nevertheless, the company's $98 billion market value is largely based on its strategy of buying and holding Bitcoin. Micro Strategy's goal is to raise $42 billion in funds through issuing stocks and fixed income securities over the next three years, and has already exceeded its equity financing target for 2025.
Some analysts believe that the company has become a Bitcoin leveraged betting company and therefore does not qualify for inclusion in Nasdaq's top 100 most important stocks.
But some analysts believe that the concept of an index is to truly represent all stocks in the stock market. Any large company that holds an important position in the NASDAQ market should be included in the index.
Even some fund managers have stated that this company is more like a commodity or ETF, because without Bitcoin, it would be "essentially a bankrupt company", and he believes that the company should be reclassified as a financial company next year. 100% of the company's value comes from Bitcoin, as other parts of the company may be negative. Most of the company's assets are purely its holdings of Bitcoin and related financial operations, so it is a financial company
Axon has less controversy. The company is known for its law enforcement tools such as Taize guns and body cameras, and is currently building a future public safety operating system by integrating hardware devices and cloud software solutions. This system can revolutionize modern law enforcement and meet the security needs of federal agencies, prisons, judiciary, and enterprises. Axon's product suite includes cloud hosted digital evidence management, productivity and real-time operation software, wearable cameras, in car cameras, Tether energy devices, robot security, and training solutions.
In the first three quarters of this year, the company's revenue increased by over 30%, and for 11 consecutive quarters, the growth rate has exceeded 25%. On the secondary market, the company's stock has risen by as much as 149% this year. As of December, out of the 16 analysts covering the stock, 14 gave a strong buy or buy rating, while the remaining 2 gave a hold rating.
