Nasdaq 100 Shakeup: Palantir, MicroStrategy In, Moderna, Super Micro Out

The Nasdaq 100 index is set for a significant shakeup on Friday, December 23, as Palantir Technologies (PLTR) and MicroStrategy (MSTR) are expected to join the index, while Moderna (MRNA) and Super Micro Computer (SMCI) could be dropped. This annual reconstitution and rebalance event will have substantial implications for index-tracking funds and investors alike.

Palantir, a software company specializing in big data analytics, is projected to add 0.47% weight to the index, making it the 40th largest holding. MicroStrategy, known for its bitcoin acquisition strategy, is also expected to have a 0.47% weight, ranking 40th. Their inclusion could boost the technology and software sectors, while potentially reducing the weight of other sectors like healthcare, which may see the removal of Moderna.

The removal of Moderna and Super Micro Computer could significantly reduce the index's exposure to biotechnology and technology hardware sectors. MRNA, a leading biotech company, has a market cap of $15.97 billion, while SMCI, a technology hardware company, has a market cap of $23.74 billion. Their removal could lead to an estimated net selling of $719 million and $1.07 billion, respectively, which could impact the index's sectoral composition and performance.

The inclusion of Palantir and MicroStrategy could drive an estimated $10.3 billion in net buying, while the removal of Moderna and Super Micro Computer could result in net selling of $1.8 billion. This could lead to substantial portfolio adjustments for index-tracking funds, with potential buying pressure on PLTR and MSTR, and selling pressure on MRNA and SMCI. Investors may react by adjusting their ETF holdings to match the new index composition, potentially driving further market activity.

The addition of Palantir and MicroStrategy to the Nasdaq 100 index could have significant implications for the overall composition and performance of the index. Their inclusion could boost the index's overall performance, as both companies have shown strong growth in recent years. Additionally, the removal of Moderna, Super Micro, and Illumina could lead to a rebalancing of the index, potentially affecting its sector allocation and performance.

In conclusion, the upcoming changes to the Nasdaq 100 index could have substantial implications for the index's composition, performance, and investors' portfolios. The inclusion of Palantir and MicroStrategy, and the potential removal of Moderna and Super Micro Computer, could drive significant market activity and impact various sectors. Investors should closely monitor these changes and adjust their portfolios accordingly to capitalize on the potential opportunities and mitigate risks.