MicroStrategy stock surges on Nasdaq-100 inclusion announcement

December 16, 2024 02:13 AM PST | By Investing

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MicroStrategy stock surges on Nasdaq-100 inclusion announcement

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Investing.com -- MicroStrategy Incorporated (NASDAQ:MSTR) shares popped 6% in premarket trading Monday as investors welcomed the Friday announcement from the Nasdaq exchange operator that the stock will be added to the Nasdaq-100 index.

The move follows a dramatic rise in the shares of the Bitcoin-focused company. The inclusion will take effect before the market opens on December 23.

Being added to the index often boosts a stock price, as funds that track the Nasdaq-100 typically buy shares of the newly included firms to align with the index's composition.

In addition to MicroStrategy, Palantir Technologies (NASDAQ:PLTR), a data analytics firm, and Axon Enterprise (NASDAQ:AXON), known for its Taser products, will also be added to the index.

Meanwhile, Illumina (NASDAQ:ILMN), a maker of gene-sequencing equipment, Super Micro Computer (NASDAQ:SMCI), which specializes in AI servers, and vaccine maker Moderna (NASDAQ:MRNA) are set to be removed.

MicroStrategy, which has aggressively invested in Bitcoin, has seen its stock skyrocket more than sixfold this year, boosting its market capitalization to nearly $94 billion.

The company shifted its strategy in 2020, using Bitcoin as a reserve asset amid declining revenue from its software business. Today, it holds the title of the largest corporate owner of the cryptocurrency.

Analysts suggest that MicroStrategy’s pivot to Bitcoin has made its stock more attractive, as its performance closely mirrors the cryptocurrency's fluctuations.

Bernstein analysts predict that the Nasdaq-100 inclusion could pave the way for potential S&P 500 inclusion by 2025. They also see the company's prospects continuing to improve next year, adding they anticipate "more visibility and recognition beyond fresh ETF inflows," as a result of the Nasdaq-100 inclusion.

Bitcoin has surged in recent weeks, fueled by optimism within the crypto sector following US President-elect Donald Trump's victory, which has raised expectations of reduced regulatory hurdles. Earlier this month, the cryptocurrency crossed the $100,000 mark for the first time.

This article first appeared in Investing.com

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