Palantir (NYSE: PLTR) stock is making big gains again in Monday's trading. The company's share price was up 11.7% as of 11:30 a.m. ET, according to data from S&P Global Market Intelligence.

Palantir is climbing in conjunction with news that the company's stock is going to be added to the S&P 500 index. Companies in the index have to meet criteria for profitability, valuation, trading volume, and other factors -- and being added to the S&P 500 generally reflects that a business has been performing well and seeing its value increase.

There's another big benefit to being added to a major index. Exchange traded funds (ETFs) that track the index will buy up shares of companies being added in order to reflect the composition change. In turn, this tends to create bullish momentum for the companies' stocks. With Palantir set to become part of the S&P 500 before the market opens on Sept. 23, the data analytics and artificial intelligence (AI) stock is already benefiting from this dynamic.

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Source Fool.com