AI Powerhouses Palantir and Dell Join S&P 500 as American Airlines Flies Out

As part of the latest quarterly market capitalization changes in the S&P 500 Index, "AI hot stock" Palantir Technologies Inc., Dell Technologies Inc., and U.S. insurance industry leader Erie Indemnity Co. will join the index.

According to a press release issued by S&P Dow Jones Indices last Friday, these companies will replace American Airlines Group Inc., Etsy Inc., and Bio-Rad Laboratories Inc. These changes will be effective before U.S. stock trading begins on September 23.

Analysts point out that the inclusion of Palantir and Dell reflects how tech companies, especially those related to artificial intelligence, are reshaping the market. Meanwhile, the removal of American Airlines underscores the recent challenges faced by the industry, including Boeing's bulk delivery delays and rising labor costs.

So, who are the “newcomers”?

First, Palantir is a renowned American big data analytics company, famously known for helping the U.S. military locate and kill Osama bin Laden using its technology. As a software company closely cooperating with the U.S. government, Palantir primarily serves defense, healthcare, and other sectors for the U.S. and its allies.

Furthermore, Palantir's software collects and analyzes data for companies like Airbus and Merck. With the rising demand for artificial intelligence in recent years, Palantir has not missed out on this surge, boasting an 82.93% stock price increase year-to-date.

As early as 2023, Palantir launched its Artificial Intelligence Platform (AIP). To date, it has been widely adopted by over 100 organizations globally, including those in healthcare and the automotive industry. The company is also in talks with over 300 additional companies. The core selling point of the AIP platform isn't building large language models (LLMs) from scratch, but rather focusing on AI applications.

This platform includes an AI assistant similar to ChatGPT, which can help businesses analyze and make decisions based on their big data operations, offering clients high-efficiency access to Palantir’s various platforms with a low technical threshold.

In summary, the company, co-founded by billionaire tech investor Peter Thiel, has evolved from providing exclusive tech services to U.S. intelligence to collaborating comprehensively with numerous government agencies. It recently expanded significantly into integrating generative AI into its commercial business.

Next up is Dell, a company globally renowned for its personal computers and display devices, likely familiar to many investors. The company’s latest financial report shows that its second-quarter revenue scale exceeded expectations due to a significant increase in sales of high-performance AI server products.

During the current AI boom, Dell is committed to offering servers optimized for AI workloads. These servers boast Dell’s leading high-performance computing capabilities and efficient resource integration system, along with NVIDIA’s latest AI GPUs to accelerate AI training and inferencing processes.

According to the August index balancing methodology, a company must have a market capitalization of at least $18 billion and meet the S&P index's profitability criteria, liquidity, and public float standards to qualify for entry into the S&P 500 Index.

Hence, inclusion in the index can significantly boost a company’s visibility, benefiting its stock price and market capitalization.

Meanwhile, the removal of American Airlines from the S&P 500 highlights the recent challenges faced by the airline industry, including delays in bulk deliveries of Boeing aircraft and rising labor costs. As passive investment funds increasingly track the S&P 500 Index, being included in this benchmark can provide substantial positive catalysts for companies’ market cap and stock price.