News 
December 17, 2024 
3 min. 
MicroStrategy (MSTR) joining the Nasdaq-100 is a significant move, but the real prize could be its potential inclusion in the S&P 500. According to Benchmark’s report on Monday, this could be a game-changer for the company in the medium term.
MicroStrategy Adds Nasdaq-100
The Nasdaq-100 addition, announced Friday, takes effect on December 23. MicroStrategy, founded by Michael Saylor, meets key S&P 500 criteria like market cap and trading volume. However, it falls short on two other requirements: positive earnings for the latest quarter and cumulative positive earnings across the last four quarters, analyst Mark Palmer explained.
Benchmark noted that MicroStrategy plans to adopt new Financial Accounting Standards Board (FASB) rules for Bitcoin accounting by Q1 2025. This shift could allow the company to report positive earnings almost immediately, clearing a major hurdle for S&P 500 inclusion.
MicroStrategy’s entry into the Nasdaq-100 is historic, as it’s the first Bitcoin-focused company in the index. With a 0.47% weighting, it becomes the 40th largest firm in the Nasdaq-100, according to a report from Bernstein on Monday.
What’s the impact on MicroStrategy
The move is a big win for MicroStrategy’s stock. The Invesco QQQ Trust Series ETF, the fifth-largest ETF by assets under management (AUM), will now add MicroStrategy to its holdings.
For context, the top three ETFs by AUM—SPDR S&P 500 (SPY), Vanguard S&P 500 (VOO), and iShares Core S&P 500 (IVV)—are all tied to the S&P 500. Combined, these ETFs control over $1.8 trillion in assets, according to VettaFi data.
The impact of joining the S&P 500 could be massive. Take Tesla (TSLA) as an example. When Tesla was added to the S&P 500 on December 21, 2020, its stock skyrocketed. It doubled from $200 to $400 within a year, with most of the gains coming before its actual inclusion. Tesla’s stock had already surged tenfold in the year leading up to the announcement.
If history repeats itself, MicroStrategy could see significant stock gains even before officially joining the S&P 500.
