Palantir, Dell rise as they join S&P 500 in latest index reshuffle

The companies will replace American Airlines Group Inc., Etsy Inc. and Bio-Rad Laboratories Inc., according to a news release from S&P Dow Jones Indices on Friday. The changes are set to take effect before trading opens on September 23.

The additions of Palantir and Dell reflect how tech companies, and especially AI-related names, are reshaping the market. Palantir, the data analytics software company co-founded by billionaire tech investor Peter Thiel, has grown from serving the U.S. intelligence community to working with dozens of government agencies and more recently expanded its commercial business .

Shares of the Denver-based company are up more than 75 percent this year as investors bet the software and surveillance firm will benefit from growing demand for its AI tools. Shares rose as much as 8.4% in after-hours trading on Friday.

Dell, the Round Rock, Texas-based company best known for personal computers and monitors, reported better-than-expected earnings last week on increased sales of servers built to handle AI workloads.

Shares in the hardware giant rose as much as 8.7 percent after the bell, while insurer Erie Indemnity rose as much as 5.5 percent.

Companies must have a market capitalization of at least $18 billion and meet profitability, liquidity and share-float standards to qualify for the S&P 500, according to the August methodology.

Meanwhile, the removal of American Airlines from the benchmark US stock index underscores the challenges the industry has faced of late, including delayed aircraft deliveries and rising labor costs. The airline cut its profit outlook in July after expectations for domestic demand proved too high. Its shares were down 0.8% in after-market Friday, adding to a 21% year-to-date decline.

Inclusion in the US equity benchmark can raise a company’s profile and is becoming increasingly important as passive investment funds grow. The push from the benchmark can hurt stock prices as index funds sell stocks to realign with the S&P 500’s new makeup.

(Updates with additional details)