Some investors were taken aback when Sandisk was added to the S&P 500 index, surpassing Strategy in the process.
Late Monday, S&P Dow Jones Indices announced that Sandisk Corp. would enter the S&P 500 on Friday.
Following the news, shares of Sandisk (SNDK), a manufacturer of computer storage devices, increased by more than 7% during the extended session. The corporation is replacing the advertising and marketing firm Interpublic Group of Companies Inc. (IPG) by switching from the S&P Small Cap 600 SML to the S&P 500 SPX.
The index revisions take effect at the opening of Friday’s session, which is shortened for the Thanksgiving holiday in the U.S. financial markets.
Sandisk stood out in the small-cap index due to its significantly larger market value than the others, with a market capitalization of over $33 billion as of Monday.
Additionally, Sandisk defeated Strategy Inc. (MSTR), an enterprise software firm that bills itself as the biggest corporate cryptocurrency owner. Formerly called MicroStrategy, Strategy was recently qualified to be included in the S&P 500.
The news on Monday was a little earlier than some investors had expected.
It was anticipated that the S&P would have changed to incorporate Sandisk or Strategy as part of a regularly planned rebalance in early December.
However, the index provider is free to decide how and when to make such changes—or even to forego them, as was the case in June.
In the last three months, Sandisk’s stock has increased by around 400% as a result of the artificial intelligence boom.
Companies want to be listed in the S&P 500 because it exposes their shares to a wider spectrum of investors, including actively managed funds with potential investment limitations and passive funds that follow the benchmark.
