It’s beginning to look a lot like… rebalancing season? In recent weeks, major indexes like the S&P 500 and Nasdaq-100 have put presents under investors’ trees in the form of new all-time highs — the S&P surpassed 6K, and the Nasdaq topped 20K for the first time. And just in time for the holidays, they’re adding a bow on top — changes to the indexes, which could impact trillions in retirement funds and shake up trading in buzzy names when these changes take effect next Monday, Dec. 23.

S&P changes:

• In November, S&P Global made an off-schedule addition to the S&P 500, replacing recently-acquired Marathon Oil with the red-hot AI player Texas Pacific LandTPL
  — up 128% YTD.
• Rounding out quarterly changes, the S&P 500 will add WorkdayWDAY
  and fast-growing private market player Apollo GlobalAPO
  next Monday — replacing IT company QorvoQRVO
  and industrial firm AmentumAMTM
  . These two have risen 95% and 3% YTD.

Nasdaq changes:

• Bitcoin “hedge fund” MicroStrategyMSTR
  , AI defense goliath PalantirPLTR
  , and government contractor Axon EnterpriseAXON
  will join the tech-heavy Nasdaq-100 after rising 509%, 351%, and 155% YTD.
• DNA tech company IlluminaILMN
  , pandemic-era biotech beneficiary ModernaMRNA
  , and controversy-prone semi stock Super MicroSMCI
  will be dropped from the index after underperforming compared to their peers.

Naive Nasdaq? Both indexes boast rich valuations, but at 38x price-to-earnings, the Nasdaq 100 is having caviar for the holidays — well beyond its typical range of 20-30x. And the new additions have even higher P/Es — 50x, 475x, and 356x, respectively. This makes the Nasdaq 100 a wildly speculative index, even by tech standards. And these crowd favorites might fall prey to their own hefty valuations once added to the index.