Food delivery giant DoorDash (DASH) is set to enter the coveted S&P 500 index (SPX), while AI (artificial intelligence) darling Palantir Technologies (PLTR) is racing ahead to the S&P 100 index. The S&P Dow Jones Indices rebalance their components on a quarterly basis to accurately represent the market capitalization of companies within the index. The news pushed DASH stock up nearly 7.5% in after-hours trading on March 7. The changes will take effect before the start of trading on March 24.
Inclusion in the S&P indices is a positive sign for the companies since it means that mutual funds and other index funds that are built to replicate these indices will need to buy their shares. Other companies that are accompanying DoorDash to the SPX include home goods retailer Williams-Sonoma (WSM), natural gas explorer Expand Energy (EXE), and World Wrestling Entertainment company TKO Group (TKO). These four companies will replace BorgWarner (BWA), Teleflex (TFX), Celanese (CE), and FMC Corp. (FMC).
At the same time, companies climbing to the S&P 100 along with Palantir include Intuitive Surgical (ISRG) and ServiceNow (NOW). They are replacing outgoing companies Dow Inc. (DOW), The Kraft Heinz Company (KHC), and Ford Motor Co. (F) as part of the index shuffle.
Is DASH a Good Stock to Buy?
DoorDash offers on-demand delivery services across the U.S., Canada, Australia, and Japan. The company is gaining a larger share in international markets, with growing user engagement and spending. Additionally, the company’s DashPass and Wolt+ membership programs are witnessing favorable growth. Plus, its advertising business is growing robustly over the quarters. All these factors have propelled DASH stock up by 38.3% in the past year, and up by 6.2% so far this year, leading to the SPX inclusion.
Wall Street analysts also remain highly optimistic about DoorDash’s stock trajectory. On TipRanks, DASH stock earns a Strong Buy consensus rating based on 23 Buys and seven Hold ratings. The average DoorDash price target of $222.46 implies a further 24.9% upside potential from current levels.
Is Palantir a Good Stock to Buy Now?
Palantir stock has zoomed nearly 235% in the past year, with the stock gaining 12.3% year-to-date. The big data analytics company boasts high-profile customers from the government and commercial sectors. Palantir’s accelerated growth is driven by expanding operating margins, and growing adjusted free cash flows. Importantly, Palantir has a loyal customer base backed by its “Revolving Door” policy, resulting in a high net dollar retention rate of 120%.
Despite its impressive growth, analysts remain cautious about Palantir’s stock trajectory. On TipRanks, PLTR stock has a Hold consensus rating currently, based on four Buys, 10 Holds, and four Sell ratings. Also, the average Palantir Technologies price target of $95.33 implies 12.3% upside potential from current levels.
