📰 Apollo Global and Workday Join the S&P 500: Who’s Next?
Coinbase, Block, and others could be next as the index reshuffles and adapts to market trends.
Apollo Global Management APO 0.00%↑ and Workday WDAY 0.00%↑ are set to join the S&P 500, replacing Qorvo QRVO 0.00%↑ and Amentum AMTM 0.00%↑, starting December 23, as announced by S&P Dow Jones Indices. This addition highlights the dynamic nature of the benchmark index, which tracks 500 leading U.S. companies across key sectors.
Qorvo and Amentum will transition to the S&P SmallCap 600, continuing the adjustments seen throughout the year. For instance, Texas Pacific Land joined the index in November, replacing Marathon Oil. These shifts reflect the evolving landscape of corporate America and are closely watched by investors, as new entrants typically see a surge in demand due to the trillions of dollars tracking the S&P 500.
Criteria for inclusion
To be included in the S&P 500, companies must meet the following requirements:
1. Market Capitalization: A minimum of $18 billion.
2. Profitability: Positive combined earnings per share (EPS) over the past four quarters and profitability in the most recent quarter.
3. Domiciled in the U.S.: The company must be based in the United States.
4. Sector Diversification: The index committee considers sector balance, ensuring the S&P 500 reflects the broader U.S. economy.
5. Stability: The committee may avoid companies with excessive volatility or those deemed unsuitable for the index.
Who’s next?
While no official announcement has been made, several companies are frequently mentioned as potential future additions. These firms meet key criteria and have shown significant growth: AppLovin, Southern Copper Corp., Coinbase, The Trade Desk, Block, Datadog, Cheniere Energy, Vertiv Holdings, Ferguson Enterprises, Veeva Systems, Ares Management, Carvana, Robinhood Markets, Carnival Corp. , First Citizens BancShares, GlobalFoundries, LPL Financial Holdings or Lennox International.
The impact of inclusion
When companies join the S&P 500, their stock prices often surge due to increased demand from index funds and ETFs. This inclusion signals stability and growth potential, drawing attention from investors worldwide.
As the index committee continues its quarterly rebalances, companies like Coinbase and Block could soon find themselves among the elite group, reshaping the portfolios of countless investors and reflecting the ever-evolving U.S. economy. The next round of changes will likely provide more surprises, keeping markets and analysts on edge.
Source: Yahoo Finance, MarketWatch
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