Nasdaq announces MicroStrategy’s inclusion in Nasdaq-100, what’s next?

Key Takeaways

MicroStrategy, Palantir Technologies, and Axon Enterprise will join the Nasdaq-100 on December 23.
MicroStrategy’s inclusion is expected to attract significant buying activity from ETFs tracking the Nasdaq-100.

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The Nasdaq-100 Index will welcome MicroStrategy, Palantir Technologies, and Axon Enterprise as new members before market open on December 23, as announced by Nasdaq during its annual reconstitution on Friday.

The three companies will replace Illumina, Super Micro Computer, and Moderna in the annual reconstitution of the index, which comprises 100 of the largest non-financial companies listed on The Nasdaq Stock Market.

With a market value of $102 billion as of December 13, MicroStrategy is set to rank 40th on the Nasdaq-100.

Entering the Nasdaq-100, MicroStrategy stands to attract approximately $2.1 billion from ETFs that directly track the index, which collectively manage around $451 billion in assets, Bloomberg ETF analyst Eric Balchunas reiterated in a post following Nasdaq’s announcement.

He added that the $2.1 billion buying estimate might be conservative as it excludes separately managed accounts, closed-end funds, and active strategies.

This weighting equates to about $2.1b of buying via all the ETFs that track the index which have $451b collectively. We did not include SMAs or CITs or any active strategies so it could be a little more when all is said and done. @JSeyff

— Eric Balchunas (@EricBalchunas) December 14, 2024

This influx of capital is projected to drive up MicroStrategy’s stock price and enhance its market visibility. Stocks typically see a rise in price following their inclusion in the Nasdaq-100.

Bernstein analysts project MicroStrategy shares could reach $600 following its inclusion in the index, driven by the anticipated capital inflow from index-tracking investment funds.

Nasdaq-100 inclusion to boost MicroStrategy’s Bitcoin buying power

MicroStrategy has established itself as a major player in the Bitcoin market through its giant holdings. The company’s inclusion in the Nasdaq-100 will likely accelerate its ambitious goal of accumulating $42 billion worth of Bitcoin over the next three years.

As MicroStrategy’s stock price rises due to increased demand, the company will have greater financial flexibility to continue its aggressive Bitcoin acquisition strategy. Michael Saylor-led company currently holds approximately 423,650 Bitcoin, valued at around $42 billion. The company has consistently expressed its intent 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 shares provides investors with indirect exposure to the Bitcoin market.

Bitcoin was up slightly following Nasdaq’s announcement. It’s now trading above $102,000 million, reflecting a 2.5% increase in the last 24 hours, per CoinGecko.

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