MicroStrategy to be added to tech-heavy Nasdaq-100 Index

(Reuters) -MicroStrategy will be added to the tech-heavy Nasdaq-100 Index, the exchange operator said on Friday, following a meteoric surge in the shares

Nasdaq-100 Index to add MicroStrategy, Palantir, Axon; remove Illumina, Super Micro, Moderna (Reuters) -Data analytics firm Palantir Technologies Inc, Taser maker Axon Enterprise Inc and bitcoin buyer MicroStrategy Inc will be added to the tech-heavy Nasdaq-100 Index, the exchange operator said on Friday.

Gene-sequencing equipment maker Illumina Inc, AI server maker Super Micro Computer Inc and vaccine maker Moderna Inc will be removed from the index, Nasdaq said.

The changes will be effective before the market opens on Dec. 23.

Inclusion in the index typically boosts the stock's price, as exchange-traded funds looking to replicate the index's performance buy shares of the newly included firm.

The Nasdaq-100 Index is designed to track the performance of the 100 largest non-financial companies listed on the Nasdaq stock exchange, based on their market capitalization. The index is widely followed by investors and serves as the underlying benchmark for several financial products, such as ETFs and options.

Among the additions, MicroStrategy has seen its shares rally over six-fold this year, taking its market value to almost $94 billion, thanks to its aggressive investment in bitcoin.

The company began buying and holding bitcoin in 2020 as revenue from its software business waned. It is now the largest corporate holder of the cryptocurrency.

Analysts have said that MicroStrategy's decision to purchase bitcoin to protect the value of its reserve assets has enhanced the appeal of its stock, which tends to align with the performance of the cryptocurrency.

Bernstein analysts expect the market will likely set its sights on S&P 500 inclusion for MicroStrategy in 2025 following the Nasdaq-100 inclusion.

The brokerage also sees the company's prospects continuing to improve next year, adding it expects "more visibility and recognition beyond fresh ETF inflows," as a result of the Nasdaq-100 inclusion.

Bitcoin has rallied in recent weeks as U.S. President-elect Donald Trump's victory heightened the crypto sector's hopes for easing regulatory roadblocks. Earlier this month, the digital asset catapulted above $100,000 for the first time.

"Management has shown no signs of slowing this (bitcoin-buying) down and are comfortable buying bitcoin in the $95K-$100K range," Bernstein analysts said.

The company held roughly 423,650 bitcoins bought for about $25.6 billion based on the average purchase price as of Dec. 8. The investment is worth around $42.43 billion, based on bitcoin's previous close, according to Reuters calculations.