For stock investors, one way to prosperity on Monday was by having a position in medical tech company Waystar (WAY 9.63%). After all, it was an outlier in the best way possible, since it shares zoomed almost 10% skyward on news that it’ll be a component in a popular stock index.

That gain was particularly impressive, as the benchmark S&P 500 (^GSPC 0.21%) bumped only 0.2% higher.

That’s one way to gain more prominence

That index is the S&P SmallCap 600, and Waystar will become one of the 600 selected for inclusion when a series of changes takes effect prior to market open on Monday, Sept. 22.

In a series of adjustments to several of its indexes announced following market close on Friday, S&P Global‘s S&P Dow Jones Indices tapped Waystar as one of 10 titles “graduating” to the small-cap lineup. The move is part of the index company’s quarterly realignment, in which at least a few of its many indexes are realigned.

With the ascension of the 10 stocks including Waystar, a corresponding number of companies were deleted from the S&P SmallCap 600. Several will be familiar to investors, including fast food restaurant operator Jack in the Box and storied tech company Xerox Holdings.

Index funds are always on the hunt

It’s important to stress that inclusion on an index, no matter how prominent, does not affect the underlying fundamental performance of an affected company. However, as index funds continue to be hotly popular, the increased demand should at least support their stock price.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends S&P Global. The Motley Fool has a disclosure policy.

A new, bullish analyst note was a key catalyst for ServiceNow (NOW 2.13%) stock’s lift as the trading week kicked off on Monday. The specialized tech company’s shares were nearly 2% higher in value during mid-session action, contrasting well with the slight dip of the S&P 500 index at that point.

Plenty of fuel for optimism, says prognosticator

ServiceNow, a business process solutions specialist that has eagerly embraced artificial intelligence (AI) technology, was the subject of an update from Cantor Fitzgerald pundit Thomas Blakey.

Before market open Monday, Blakey reiterated his overweight (buy, in other words) recommendation on ServiceNow. He also held fast to his $1,200-per-share price target, which is almost 22% above the stock’s current level.

According to reports, the analyst’s new take is based largely on the second-quarter results ServiceNow published late last week. Blakey waxed bullish about the take-up of the company’s agentic AI products, such as Control Tower, and he feels that management’s raised guidance for the third quarter is conservative, given the momentum of those products.

Public- and private-sector business

Despite the estimates-topping quarter and the raised guidance, some investors are wary of ServiceNow because of its considerable work for the federal government. They worry that cutbacks in federal spending will put quite a dent in this business.

Addressing that, Blakey wrote in his new note that the company hasn’t suffered from this yet and if it does in the future, it should be able to adjust (presumably with increased take-up from private-sector clients).

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends ServiceNow. The Motley Fool has a disclosure policy.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The continuing threat of a far-reaching trade war and on-again, off-again tariffs has sparked historic volatility in the stock market in recent weeks. The dour mood resulting from ongoing correction has been offset by waves of euphoria, with investors latching onto any positive developments to bid up stocks from recent lows. A bit of good news over the weekend sparked a broad-based rally to kick off the week.

With that as a backdrop, artificial intelligence (AI) specialist Palantir Technologies (PLTR 4.62%) surged 4.6%, semiconductor supplier Micron Technology (MU 1.70%) jumped 2.6%, and iPhone maker Apple (AAPL 2.45%) rallied 2.4%, as of 11:52 a.m. ET on Monday.

Tariffs uncertain

A memo was released by U.S. Customs and Border Protection late Friday, which granted a temporary exclusion from the 145% tariffs on certain electronics from China. The excluded products included smartphones, semiconductors, and chipmaking equipment. The move appeared to be a step in the right direction, as investors have feared that a protracted and far-reaching trade war could stifle the adoption of AI.

In response to this move, Wedbush analyst Dan Ives said that by taking this step, the White House “took the doomsday scenario off the table, and tech stocks will rally tomorrow as investors can now breathe a sigh of relief.”

The certainty was short-lived, as the Trump administration appeared to backpedal in the days that followed. In an interview this weekend, Secretary of Commerce Howard Lutnick said the exemption was only temporary, and tariffs would be hitting electronics over the next couple of months, which would include smartphones and computers.

President Trump sought to clarify his stance Monday morning, saying these products would not be exempted, but instead, “they are just moving to a different Tariff ‘bucket.'”

In a bit of late-breaking company-specific news this morning, the North Atlantic Treaty Organization (NATO) announced in a press release that it had finalized the acquisition of Palantir’s Maven Smart System, which would be deployed at NATO’s Allied Command Operations military headquarters. The announcement noted that the sale was completed on March 25.

Supreme Headquarters Allied Powers Europe (SHAPE) and NATO are using Palantir’s system as a springboard to adopt a range of state-of-the-art systems, “including new, emerging AI models, and modeling and simulation.”

Some investors feared that Palantir’s future results could be negatively affected by spending cuts by the U.S. Department of Defense. However, the ongoing push for more efficient and effective warfighting capabilities by the U.S. and its allies suggests that Palantir could actually be a beneficiary of the modernization efforts by replacing antiquated systems with cutting-edge upgrades.

Time is on our side

While the AI revolution has been front and center for a couple of years, many believe it’s still very early in the overall integration of the technology, and each of our trio of stocks is well-positioned to benefit from these secular tailwinds:

• Palantir’s Artificial Intelligence Platform (AIP) has seen robust adoption, which has been fueling accelerating sales and profit growth.
• Micron is a leading provider of the memory (DRAM) and storage (NAND) chips that are critical components in AI processing.
• Apple is in the process of rolling out its Apple Intelligence across 2.35 billion devices, introducing AI across a broad swath of its products and services.

Some investors fear that a protracted trade war and far-reaching tariffs could stifle AI adoption by significantly increasing the cost of the semiconductors and supplementary products fueling these systems. That said, continuing innovation in the space will likely continue to drive the adoption of AI higher and benefit our trio of companies.

From a valuation perspective, Palantir is still pricey at 165 times forward earnings. However, Apple and Micron are attractively priced, selling for 28 times and 10 times forward earnings, respectively.

Danny Vena has positions in Apple and Palantir Technologies. The Motley Fool has positions in and recommends Apple and Palantir Technologies. The Motley Fool has a disclosure policy.