What’s subsequent for HOOD inventory?
Robinhood’s inventory has rallied laborious in latest weeks on hopes of being added to the S&P 500 index, however many traders have been dissatisfied with the announcment that S&P Dow Jones Indices will make no adjustments to the S&P 500 lineup
S&P Dow Jones, the operator of the coveted S&P 500 index, confirmed Friday afternoon that it’s going to make no adjustments to the index. Robinhood was broadly thought-about to be the subsequent inventory added to the index so affirmation it will likely be ignored despatched Robinhood’s inventory down sharply on Monday. Expectations have been excessive as Financial institution of America analysts had not too long ago referred to as Robinhood the S&P 500’s “prime candidate” for inclusion.
Robinhood’s inventory was down round 5% Monday afternoon on a day when Bitcoin (BTC) moved larger.
Robinhood has turn into sufficiently big to qualify for the S&P 500. By mid-2025 its market capitalization was roughly $66 billion, nicely above the $20.5 billion minimal and much bigger than most small-caps within the index. The corporate is U.S.-based, traded on Nasdaq, and in any other case meets S&P International’s itemizing standards. In truth, Robinhood’s inventory doubled in 2025 main as much as the scheduled quarterly rebalance, reaching all-time highs as traders speculated on index inclusion.
We are able to fairly conclude that Robinhood was not excluded for failing to fulfill requirements. Reasonably, it merely didn’t get a slot as a result of the committee saved the lineup intact. Because the S&P 500 is a set roster of 500 shares, including an organization requires eradicating one other. On this case, the committee evidently noticed no must swap anybody out. As such, the omission was a matter of timing and index process, not a score of the enterprise itself.
Current Additions to the S&P 500
For context, the final firms really added to the S&P 500 got here in Could and March 2025. On Could 19, rival cryptocurrency alternate Coinbase International turned the primary digital-asset firm to enter the benchmark. Earlier, on March 24, DoorDash (DASH), communication agency TKO Group (TKO), retailer Williams-Sonoma (WSM), and oil-and-gas firm Broaden Vitality (EXE) joined the index.
These names changed Uncover Monetary, BorgWarner, Teleflex, Celanese and FMC. By comparability, the June rebalance introduced no newcomers. Merely put, Robinhood missed its probability as a result of the S&P 500 held regular.
What If Robinhood Had Been Included?
When a inventory is added, all S&P-tracking funds should purchase shares, typically driving the worth larger. When smaller firms be part of a significant index, “hundreds of thousands of {dollars} might doubtlessly circulate to them” simply from passive shopping for.
Contemplate that the biggest S&P 500 ETF (SPY) manages nicely over half a trillion {dollars} so any addition forces large purchases. Furthermore, index membership will increase a inventory’s visibility.
In sensible phrases, meaning a brand new S&P 500 addition typically enjoys further demand and publicity (at the least within the quick time period) as mutual funds, pension plans and ETFs purchase the inventory. This “index impact” has traditionally lifted many shares a number of p.c once they be part of the five hundred. In Robinhood’s case, analysts estimated that inclusion might have lifted it a number of p.c larger, it had already spiked on the mere expectation of becoming a member of.
What’s Subsequent for Robinhood?
Wanting forward, Robinhood stays well-positioned and continues to fulfill S&P necessities, so its candidacy stays intact. When one other slot opens up, as an example when a present member is eliminated attributable to a takeover or different company motion, Robinhood would seemingly be reconsidered. The pending Nippon Metal–U.S. Metal deal is the subsequent attainable catalyst exterior of the common shuffle for an index inclusion so it might be a matter of when, and never if Robinhood is promoted to the membership.
The following S&P 500 rebalancing (normally in September) might supply a contemporary alternative for Robinhood.