Shares of Dell Technologies (DELL) and Palantir Technologies (PLTR) popped in extended trading on September 6 on news of their inclusion in the S&P 500 Index (SPX). DELL stock was up nearly 5%, while PLTR stock spiked nearly 8%, both nearing their 52-week highs. S&P Dow Jones Indices published their list related to quarterly rebalancing of stocks on Friday after the market closed. The changes will take effect on September 23, the last trading Monday before the quarter ends.
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Every quarter, the S&P 500, S&P MidCap 400, and S&P SmallCap 600 indices are rebalanced. To be eligible for SPX inclusion, a company must post a profit in the most recent quarter and have cumulative profit in the past four consecutive quarters. It has been observed that stocks often surge after their inclusion in the S&P 500 Index. Both Dell Technologies and Palantir are benefiting massively from the AI (artificial intelligence) revolution.
DELL Rises 35% YTD on AI Server Demand
DELL stock is up 35% year-to-date, backed by solid demand for its AI servers. AI servers carry GPUs (graphic processing units) that make AI workloads possible. Dell has reported a profit in the past several consecutive quarters and has surpassed the consensus for the past ten quarters.
For Q2 FY25, Dell saw a 23% sequential jump in AI-optimized server demand. The company noted that the number of enterprises buying AI solutions is growing each quarter. Dell will replace the stock of e-commerce shopping platform Etsy (ETSY) in the S&P 500 Index. ETSY shares have lost 34.4% of their value in 2024 owing to the shift in customer’s buying patterns.
PLTR Stock Zooms 76.7% YTD on AI Tailwinds
PLTR shares have zoomed 76.7% so far this year, thanks to accelerated demand for its AI software. Palantir has been reporting GAAP profits since Q4 2022. It has exceeded analysts’ expectations for the past four consecutive quarters.
The big data analytics company reported solid beat-and-raise results for Q2 FY24. Sales rose 27.2% year-over-year, driven by a 55% growth in the U.S. Commercial segment and a 24% jump in the U.S. Government segment. Palantir will replace America’s big four air carrier American Airlines (AAL), whose shares have declined 21.4% so far this year.
Insights from TipRanks’ Stock Comparison Tool
We used TipRanks’ Stock Comparison tool to compare and see how DELL and PLTR fare on various parameters. We find that Dell Technologies stock is ranked highly on almost all of TipRanks’ metrics and earns a Strong Buy consensus rating. Moreover, the average Dell Technologies share price target of $147.26 implies 44.4% upside potential from current levels.
Meanwhile, Wall Street has a Hold rating on PLTR stock. The average Palantir Technologies price target of $25.42 implies 16.2% downside potential from current levels.
