Dell and Palantir to join S&P 500; shares of both jump

Dell and Palantir both jumped about 7% in extended trading Friday after S&P Global announced that the companies would join the S&P 500 index.

Software maker Palantir will take the place of American Airlines, and Dell is replacing Etsy, according to a statement. Shares of companies added to the benchmark often rally after the announcement because fund managers who track the index regularly update their portfolios to mirror the additions.

For Dell, the announcement marks a return to the benchmark index. The computer and server maker was a constituent from 1996 to 2013, when founder Michael Dell and private equity firm Silver Lake took the company private. Dell went public again in 2018.

Super Micro Computer, which competes with Dell in selling servers for artificial intelligence workloads, joined the S&P 500 earlier this year following a historic rally in the stock that has pushed the company's market cap past $50 billion. Its value has since been sliced in half.

After operating as a venture-backed startup for more than 15 years, Palantir went public on the New York Stock Exchange in 2020, and in the fourth quarter of 2022, the company started posting profits. In the second quarter, Palantir's net income totaled $135.6 million, up from $27.9 million in the same period a year earlier. Annual revenue growth has accelerated for four quarters in a row.

Palantir co-founder and CEO Alex Karp has gained a reputation for promoting patriotism in tech, helping the government and military agencies manage their data. He recently told The New York Times that Palantir is engaged in "the finding of hidden things."

To join the S&P 500, a company must have reported a profit in its latest quarter and have cumulative profit over the four most