Palantir Technologies’ soaring stock price is likely to leave its mark on the final reconstitution of FTSE Russell’s benchmark indexes on Friday. The company’s shares have surged more than 460% since last year’s reconstitution, making it a prime candidate to enter the top 200 large-cap names in the Russell 1000.
The reshuffle forces fund managers to adjust their portfolios, and Palantir is expected to create a void among the mid-cap tech sector. This shift could lead to a drop of over 11% for the technology sector in the Russell midcap growth index.
As investors take advantage of the increased liquidity, trading volumes are expected to be high, with some analysts estimating $150 billion in net trades this year. However, not all changes to the indexes are as straightforward as Palantir’s move.
FTSE Russell occasionally updates its methodology for inclusion into its indexes, but this year saw little change in rules. Instead, the company clarified its domicile rule, which addresses companies with dual headquarters. Brookfield Asset Management and Restaurant Brands are among those expected to be added to the indexes.
While some companies benefit from being included in the indexes, others see their prices decline or fail to rise. As investors attempt to take advantage of the liquidity event, they may “force back” their positions or exit existing ones, potentially crowding out trades.
Palantir’s surge is set to create a ripple effect on the market, with some analysts warning of a potential drop in the technology sector. The company’s move into the Russell 1000 is a significant milestone, and its impact will be closely watched by investors and fund managers.
Source: https://www.reuters.com/business/finance/palantirs-surge-leave-its-mark-russell-reshuffle-2025-06-25