Robinhood finally gets a place in the S&P 500. These other stocks will join as well.

By Emily Bary

AppLovin and Emcor were also tapped to join the benchmark index later this month, as MarketAxess, Caesars and Enphase get the boot

AppLovin was the largest company eligible to be added to the S&P 500.

Robinhood Markets Inc. finally got the nod: It will join the S&P 500 later this month.

S&P Dow Jones Indices said late Friday that it is adding the financial-technology company (HOOD) to the index before the market open on Sept. 22, along with AppLovin Corp. (APP) and Emcor Group Inc. (EME)

Those companies will replace MarketAxess Holdings Inc. (MKTX), Caesars Entertainment Inc. (CZR) and Enphase Energy Inc. (ENPH) on the stock-market benchmark.

The S&P 500 SPX encompasses some of the largest companies in the U.S., but the index committee has latitude to decide which U.S.-domiciled businesses make the cut - provided they meet various criteria, such as a market capitalization of at least $22.7 billion, a float market capitalization of at least $10.25 billion and "financial viability." To show financial viability, companies must have been profitable on a GAAP basis in the most recent quarter, and when looking at the sum of the past four quarters.

Being in the S&P 500 comes with various perks, like forced attention from fund managers that track the index and the metaphorical badge of legitimacy that comes from being in an exclusive club.

Some thought Robinhood would make the cut in the previous expected quarterly rebalance, but the committee didn't make any changes at that time. Nor did it choose the online brokerage when it made several unscheduled swaps to account for recently closed mergers involving components. Robinhood was the third-largest eligible company not to have a place yet in the index, according to data from Stephens.

Robinhood's stock was climbing 6.6% in Friday's after-hours action on the back of its inclusion.

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AppLovin, meanwhile, was the largest eligible name by market cap, which stood at $166 billion as of the close. Shares of the company, which makes app-monetization technology, were up 6.5% in the extended session. Emcor, which provides construction and maintenance services, was seeing its stock rise 2.1% on the news.

Robinhood is in the S&P 500's financials sector XX:SP500.40, while AppLovin is classified as information technology XX:SP500.45 and Emcor is in the industrials sector XX:SP500.20.

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Strategy Inc. (MSTR), formerly known as MicroStrategy, ranked second by market cap among eligible candidates, but was not chosen for the index. It was newly eligible, according to Stephens managing director Melissa Roberts, as the software company and noted bitcoin (BTCUSD) holder recently cleared the "financial viability" hurdle.

Other newly eligible names included Astera Labs Inc. (ALAB), a semiconductor company that has crossed the market-cap threshold, and Pure Storage Inc. (PSTG), which has seen its stock rise 42% in the last month alone and is a candidate for a promotion from the S&P MidCap 400 MID by virtue of that appreciation in its value. Neither of those companies were chosen, either.

While the quarterly rebalances get a lot of attention because they tend to follow a schedule - with announcements typically taking place on the first Friday of the last month of the quarter, before changes go into effect two weeks later - about 90% of the nearly 800 S&P 500 member changes have taken place at other times, based on analysis by S&P Dow Jones Indices that looked at data from 1995 to 2023.

Ahead of Friday's announcement, Roberts noted that there were "20 S&P 1500 stocks that are M&A targets, and will drive necessary index changes." Those changes tend to take place when deals close, even if the timing is outside the quarterly rebalance cadence.

-Emily Bary

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09-05-25 1842ET