Why Nike is leaving S&P 100 index after 18 years
What's the story
Nike, the sportswear giant, will be removed from the S&P 100 index on September 21. The move ends its nearly 18-year run in this benchmark of US's largest and most established companies. The decision was confirmed by S&P Dow Jones Indices as part of its quarterly index rebalancing. Despite this, Nike will continue to be a part of the broader S&P 500 index.
Market shift
Reasons behind Nike's removal
Nike's removal from the S&P 100 comes as its market cap has dropped significantly.
The company's market cap has fallen to some $57 billion from nearly $264 billion at the end of 2021.
Meanwhile, four technology stocks - Dell Technologies, Palo Alto Networks, Arista Networks, and SanDisk - will take their place in the index.
All four replacements are from the information technology sector, further tilting the index toward AI infrastructure, semiconductors, memory and cybersecurity.
Investor response
SanDisk's stock surges ahead of S&P 100 inclusion
Ahead of its inclusion in the S&P 100, SanDisk's shares witnessed a major surge.
The company's stock price jumped by 11.9% on Friday to close at $1,740, marking its third consecutive session of gains.
Its entry into the index could further boost institutional demand as funds tracking the index will have to rebalance their portfolios accordingly.
Stock analysis
Nike's stock hits lowest level in over a decade
Nike's stock closed at $38.40 on Friday, its lowest level in 12 years. The stock has halved over the past year and is down about 76% over five years.
The decline reflects a broader struggle to reignite growth after years of dominance in the global sportswear market.
Despite these challenges, not everyone believes Nike's future is bleak, citing recent growth in its running business and improving wholesale performance in North America.