AppLovin and Robinhood Markets experienced significant stock price increases on Friday, jumping roughly 7% in extended trading. This surge followed the announcement by S&P Global that both companies would be added to the prestigious S&P 500 index, effective before the market opens on September 22nd. AppLovin will replace MarketAxess Holdings, while Robinhood will replace Caesars Entertainment. This news marks a considerable achievement for both companies, particularly given previous setbacks in their bids for inclusion.
AppLovin faced opposition from short-seller Fuzzy Panda Research in March, who urged the index committee to reject its inclusion. The company had previously seen a 15% drop in its share in December after being passed over for Workday. Similarly, Robinhood experienced a 2% dip in June after being excluded from a quarterly index rebalancing. The inclusion of these companies reflects a growing trend within the S&P 500, showcasing an increasing concentration of large technology companies. Other tech firms, such as Datadog and DoorDash, joined the index earlier this year.
The addition of AppLovin and Robinhood to the S&P 500 is expected to impact their stock performance positively. Index fund managers will be required to purchase shares of both companies to accurately reflect the index composition, leading to increased demand and, consequently, higher stock prices. This is a common occurrence following announcements of S&P 500 inclusions. Both companies went public on Nasdaq in 2021 and have experienced significant growth and investor interest since then.
AppLovin, a mobile advertising technology company, has experienced remarkable growth, with its shares gaining 278% in 2023 and over 700% in 2024. While its 2025 performance has been less dramatic, the addition to the S&P 500 is likely to provide a significant boost. Meanwhile, Robinhood, the popular stock trading app, has become a favorite among retail investors, particularly known for its involvement in the trading of “meme stocks.” This news follows CEO Vlad Tenev’s previous comments at the company’s annual general meeting, suggesting hope for eventual S&P 500 inclusion. In contrast, MarketAxess and Caesars Entertainment, the companies being replaced, have seen their share prices decline by 17% and 21% respectively, this year.
