MicroStrategy to Join Nasdaq-100 Index as Bitcoin Bet Pays Off

(Reuters) -MicroStrategy will be added to the tech-heavy Nasdaq-100 Index, the exchange operator said on Friday, following a meteoric surge in the shares of the bitcoin buyer.

Tech-firm MicroStrategy (NASDAQ:MSTR) will be included in the Nasdaq-100 Index, the exchange said on Friday, as the bitcoin buyer's shares posted a stellar surge this year.

The change will be effective before the market opens on Dec. 23, Nasdaq said.

Being included in the index usually leads to an increase in the stock's price, as exchange-traded funds that aim to match the index's performance buy shares of the newly included firm.

Data analytics firm Palantir Technologies (NASDAQ:PLTR) and Taser maker Axon Enterprise (NASDAQ:AXON) were added to the Nasdaq-100 Index together with MicroStrategy. Gene-sequencing equipment maker Illumina (NASDAQ:ILMN), AI server maker Super Micro Computer (NASDAQ:SMCI) and vaccine maker Moderna (NASDAQ:MRNA) were removed, Nasdaq said.

MicroStrategy, an aggressive investor in the world's largest crypto asset, saw its shares skyrocket more than six-fold this year, valuing the company at nearly $94 billion.

The firm began purchasing and holding bitcoin in 2020 as revenue from its software business declined. It is currently the largest corporate holder of the cryptocurrency.

Analysts said that MicroStrategy's decision to buy bitcoin to preserve the value of its reserve assets made its stock more appealing, which usually moves in line with the performance of the cryptocurrency.

Following the Nasdaq-100 inclusion, Bernstein analysts said that the market will likely focus on S&P 500 inclusion for MicroStrategy in 2025.

The brokerage also expects the company's prospects to improve further next year, adding that the Nasdaq-100 inclusion will bring "more visibility and recognition" beyond fresh ETF inflows.

Bitcoin rallied in recent weeks as U.S. President-elect Donald Trump's victory raised hopes in the crypto sector for an easing of regulatory hurdles. Earlier this month, the digital asset surged above $100,000 for the first time.

"Management shows no signs of slowing this (bitcoin-buying) down and are comfortable buying bitcoin in the $95K-$100K range," the Bernstein analysts added.

The company held about 423,650 bitcoins purchased for an average price of roughly $25.6 billion, based on the average purchase price as of Dec. 8. The investment is valued at about $42.43 billion, based on bitcoin's previous close, according to Reuters calculations.