Getting added to the S&P 500 is a big deal. To join, a company must have been profitable for the last four quarters as a whole and in the most recent quarter specifically, with a market cap of at least $22.7 billion.
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It also must meet float and volume criteria. When stocks are added to the S&P 500, they typically experience a short-term price surge known as the “index effect,” as massive mutual funds and ETFs are forced to buy the shares to mirror the benchmark.
Historically, newly added S&P 500 stocks see stronger trading volumes and short-term price spikes as funds adjust their holdings.
On the morning of June 8,Marvell (NASDAQ: MRVL) announced it would join the S&P 500 on June 22. It would soar from about $289 to a high of $329.80 shortly after. Unfortunately, it would get caught up in a Nasdaq drop shortly after that.
Flex (NASDAQ: FLEX), the provider of electronic manufacturing services, said it would also join the S&P 500 on June 22. The stock would jump from about $138 to a high of $165.72 before also diving with the Nasdaq. Or, look at Lumentum (NASDAQ: LITE), which was added to the S&P 500 on March 23, running from about $710 to $800 a share shortly after.
Reddit May Be Ready To Soar
Reddit (NYSE: RDDT) will officially join the index on August 18, and will AvalonBay Communities (NYSE: AVB), a real estate company. Reddit will also become only the second major social media company in the S&P 500. Other social media companies, such as Pinterest (NYSE: PINS) and Snap (NYSE: SNAP), are publicly traded but are smaller than Reddit in terms of market value. Twitter was once part of the S&P 500, but it was removed after Elon Musk bought the company in 2022.
RDDT’s addition to the S&P 500 comes after a period of strong growth. The company recently reported its second-quarter results and said its sales had grown by more than 60% for the eighth quarter in a row. However, analysts do have their concerns. For one, some are worried about the company’s reliance on Google to bring new users to Reddit.
Two, Reddit has said its search traffic had been unpredictable, with CEO Steve Huffman blaming some of the changes on Google’s growing use of artificial intelligence, including its Gemini-powered AI Overviews. Still, despite those issues, joining the S&P 500 is an important milestone for Reddit. It could bring more attention from investors.
Larry Benedict — who beat the S&P 500 by 18X in 2025 and made clients $95M during the 2008 crisis — says Trump installing a new Fed chair is triggering the most significant shift in U.S. markets in nearly 20 years.
Readers had chances at 62% in 2020, 117% under a month in 2022, 89% in 17 days after Jackson Hole. One ticker at the center.
RDDT’s addition to the S&P 500 could give the company an important boost as it continues to grow. History shows that companies added to the index can see increased trading activity and a short-term rise in their stock price as major funds buy shares.
However, the company still faces some challenges, particularly its reliance on Google search to attract new users and the impact of Google’s growing use of AI. While the S&P 500 inclusion does not guarantee that RDDT will continue to rise, it puts the company in the spotlight and could attract more interest from investors.
For now, investors will be watching closely to see whether Reddit can follow the path of other recent S&P 500 additions and turn its new status into continued momentum.
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