Peloton Interactive (NASDAQ:PTON) and Atlassian (NASDAQ:TEAM) are about to graduate to a high-profile stock index. Nasdaq (NASDAQ:NDAQ) announced Monday morning that the two companies are going to be added to the stock exchange operator's Nasdaq 100 stock index. This will become effective in advance of market open next Monday, Dec. 21.

The Nasdaq 100 comprises the 100 largest (in terms of market capitalization) non-financial issuers traded on the namesake exchange. It is considered to be one of two key Nasdaq indexes in addition to the Nasdaq Composite.

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Nasdaq adjusts the composition of the index once every year around this time. In addition to Peloton and Atlassian, four other stocks are joining it: American Electric Power, which recently migrated from the New York Stock Exchange, Marvell Technology, Okta, and Match Group.

As new stocks come into the index, old ones go away. In order to make room for the newcomers, a six-pack of known companies is departing. These include BioMarin Pharmaceutical, Expedia Group, Take-Two Interactive Software, Ulta Beauty, Citrix Systems, and Liberty Global

While inclusion on a high-profile index has almost no effect on the underlying fundamentals of a company, it does confer a greater degree of legitimacy on its stock. It also makes it more of a target for the many index stocks available to investors today, as many of these securities are obligated to hold stocks that belong to top-shelf indexes.

Peloton and Atlassian both rose in price on Monday following the announcement. The former's stock rose by 4.1% and the latter's by 1.2%.

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