Nike will leave the S&P 100 on September 21, making room for four technology companies. Dell Technologies, Palo Alto Networks, Arista Networks and SanDisk will move into the index after being promoted from the broader S&P 500.
S&P Dow Jones Indices confirmed the changes as part of its quarterly index rebalance. Nike will remain part of the S&P 500, but it will no longer rank among the 100 largest U.S. companies represented in the S&P 100.
Four Technology Companies Fill the Vacancies
Nike is not the only company leaving the index. Honeywell Aerospace, Simon Property Group and Colgate-Palmolive will also exit on September 21. All four companies taking their places, however, come from the information technology sector.
The changes give the S&P 100 greater exposure to areas such as semiconductors, cloud infrastructure and cybersecurity.
Arista Networks produces networking switches used to connect AI data centers, while SanDisk, which was spun off from Western Digital last year, specializes in flash memory products.
Palo Alto Networks CEO Nikesh Arora recently said that the surge in AI investment requires a new generation of AI-focused security infrastructure. Dell Technologies completes the group of incoming technology companies.
All four companies stand to benefit from the surge in corporate capital spending that has helped drive markets to record highs this year.
The S&P 100 consists of some of the largest and most established companies within the S&P 500. Investment funds that track the index will therefore need to purchase shares of the incoming companies while selling shares of those being removed. SanDisk shares rose following news of the change.
Bloom Energy, Illumina and Everpure will also join the S&P 500 on the same morning.
Why Nike Stock Fell Out of the S&P 100 Index
Nike’s declining share price has played a major role in its removal from the S&P 100. The company closed at $38.40 on Friday, its lowest level in 12 years. Its stock has fallen by approximately half over the past year and around 76% over the last five years.
The company’s market capitalization reflects the decline. Nike is now valued at roughly $57 billion, compared with approximately $264 billion at the end of 2021.
By comparison, the S&P 100 has gained 83% over the same five-year period.
Crypto traders have closely followed Nike’s decline, particularly because the company’s stock has performed worse than Bitcoin since 2021. Strategy also introduced $250 Bitcoin-themed Jordans last week, although customers cannot use cryptocurrency to purchase them.
Nike continues to sell substantially more sneakers than SanDisk sells memory chips. However, investors ultimately place a premium on growth – and at the moment, technology companies are attracting that demand.
Original story: “Nike Exits the S&P 100 Index. 4 Tech Stocks Move In” by Phil Haunhorst.
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