Both Dell and Palantir have been approved to join the S&P 500, resulting in a rise in their respective share prices.

• On Friday, Dell and Palantir's shares increased in extended trading after being included in the S&P 500.
• After tech companies Super Micro and CrowdStrike joined the index earlier this year, their inclusion has come.
• In 2013, Dell was removed from the index after the company was acquired by founder Michael Dell in a private deal.

On Friday, both companies experienced a 7% increase in extended trading after S&P Global announced their inclusion in the S&P 500 U.S. stock index.

According to a statement, Palantir will replace Etsy.

Dell was not a newcomer to the index, as it was a constituent from 1996 to 2013 and went public again in 2018.

Super Micro Computer, a competitor of Dell in the server market for AI workloads, was added to the S&P 500 earlier this year after a remarkable stock price increase that raised the company's market value above $50 billion. However, its value has since been cut in half.

Palantir, a venture-backed startup that operated for over a decade, went public on the New York Stock Exchange in 2020 and started posting profits in the fourth quarter of 2022. In the second quarter of 2022, Palantir's net income increased from $27.9 million to $135.6 million.

Palantir's CEO, Alex Karp, has earned a reputation for aiding companies and government agencies in managing their data. In a recent interview with The New York Times, Karp revealed that Palantir is involved in "uncovering concealed information."

Since 2019, Dell has been profitable almost every quarter. In 2023, shares of Dell jumped 90%, and they were up 33% before the rebalancing announcement. Investors are excited about growth in sales of servers containing graphics processing units that can handle artificial intelligence workloads. Dell told investors last week that it has seen $3.2 billion in AI server demand in the quarter ended Aug. 2, up 23% from the prior quarter.

During the previous rebalancing in June, a cybersecurity vendor was included in the index.

After the announcement of new companies being added to the benchmark, fund managers who closely monitor the index frequently update their portfolios, resulting in a rally of shares.

U.S. stocks with high market capitalizations are better reflected in the median market cap of companies in the S&P Global index, which is approximately $33.5 billion. Palantir has a market cap of over $67 billion, while Dell is valued at over $72 billion.

— CNBC's Ari Levy contributed to this report.

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