Key takeaways
- MicroStrategy, Palantir Technologies and Axon Enterprise will join the Nasdaq-100 on December 23rd.
- MicroStrategy’s inclusion is expected to attract significant buying activity from ETFs that track the Nasdaq-100.
The Nasdaq-100 Index will welcome MicroStrategy, Palantir Technologies and Axon Enterprise as new members before the market opens on December 23, which announced of Nasdaq during its annual reconstitution on Friday.
The three companies will replace Illumina, Super Micro Computer and Moderna in the annual reconstruction of the index, which includes 100 of the largest non-financial companies listed on the Nasdaq Stock Market.
With a market capitalization of $102 billion as of December 13, MicroStrategy is set to rank 40th on the Nasdaq-100.
Entering the Nasdaq-100MicroStrategy will attract about $2.1 billion from ETFs that directly track the index, which collectively manage about $451 billion in assets, Bloomberg ETF analyst Eric Balchunas reiterated in a post after Nasdaq’s announcement.
He added that the $2.1 billion purchase estimate may be conservative because it excludes separately managed accounts, closed-end funds and active strategies.
This weighting equates to about $2.1 billion in purchases across all ETFs tracking the index, which has a combined $451 billion. We didn’t include SMAs or CITs or any active strategies so there might be a bit more when all is said and done. @JSeyff
— Eric Balchunas (@EricBalchunas) December 14, 2024
This capital inflow is expected to boost MicroStrategy’s share price and improve its visibility in the market. Stocks typically see a rise in price after being included in the Nasdaq-100.
Bernstein analysts believe MicroStrategy shares could reach $600 after inclusion in the index, driven by expected capital inflows from index-tracking mutual funds.
Nasdaq-100 Inclusion to Increase MicroStrategy’s Bitcoin Purchasing Power
MicroStrategy has established itself as a major player in the Bitcoin market through its gigantic holdings. The company’s inclusion in the Nasdaq-100 is likely to accelerate its ambitious goal of accumulating $42 billion in Bitcoin over the next three years.
As MicroStrategy’s stock price rises due to increased demand, the company will have major financial flexibility to continue its aggressive Bitcoin acquisition strategy. The Michael Saylor-led company currently holds about 423,650 Bitcoin, valued at about $42 billion. The company has consistently expressed its intention to further increase its Bitcoin holdings, even at higher prices.
MicroStrategy’s aggressive Bitcoin investment makes its stock a proxy for Bitcoin. This means that owning MicroStrategy stock gives investors indirect exposure to the Bitcoin market.
Bitcoin was up easy after Nasdaq’s announcement. It now trades above $102,000 million, reflecting a 2.5% increase in the last 24 hours, for CoinGecko.
