DoorDash is among four companies set to join the S&P 500, while AppLovin and Coinbase missed out.
The committee responsible for selecting S&P 500 components has significant discretion in determining new entrants. This time, it appears to be prioritizing stability over volatility.
S&P Dow Jones Indices announced Friday that four new companies will be added to the index later this month. DoorDash Inc. (DASH) is the largest among the new entrants, joined by TKO Group Holdings Inc. (TKO), Williams-Sonoma Inc. (WSM), and Expand Energy Corp. (EXE).
The S&P 500 comprises some of the largest U.S. companies by market capitalization, but inclusion depends on more than just size. Companies must meet specific criteria related to profitability and float, among other factors. Additionally, the selection committee considers elements like sector diversification and volatility when making decisions.
Although DoorDash is one of the bigger companies that met the criteria, it wasn’t the largest. AppLovin Corp. (APP) and Interactive Brokers Group Inc. (IBKR) both have higher market caps but were not selected.
Notably, the committee did not make any changes to the S&P 500’s technology sector this time. While DoorDash operates in the online food-delivery space and has tech-adjacent elements, it is classified as a consumer-discretionary company. The committee may have viewed it as a more stable choice compared to AppLovin, which recently faced scrutiny from two short-seller reports.
AppLovin’s stock surged more than 700% in 2024 but has declined in early 2025. By contrast, DoorDash’s stock saw a 70% increase last year and has continued to rise. The company recently became eligible for S&P 500 inclusion after meeting profitability criteria.
Coinbase Global Inc. (COIN), though smaller than DoorDash, was also considered a potential addition but was not selected. As a cryptocurrency exchange, Coinbase operates in a rapidly evolving regulatory environment. Its stock has surged more than 500% since the end of 2022, but its volatility may have worked against its inclusion.
Historically, high-flying stocks that miss S&P 500 inclusion often experience significant volatility. Super Micro Computer Inc. (SMCI), which joined the index in March 2024, has seen its stock price more than halve since its inclusion due to concerns over financial controls and increasing competition in the server market. Super Micro’s stock remains one of the most volatile within the index.
Bernstein analysts noted before the December 2024 reshuffle that while new entrants typically outperform the S&P 500 in the year before their addition, they see only mild outperformance in the five days following the announcement, with relative returns tapering off thereafter.
Stocks often receive an initial boost upon being named future S&P 500 constituents because index-tracking funds must purchase shares of the newly included companies. This trend was evident in Friday’s extended trading session. DoorDash shares jumped 6%, TKO gained 2.4%, Williams-Sonoma rose 1.6%, and Expand Energy advanced 2.3%.
Meanwhile, stocks of companies left out of the index saw declines. AppLovin fell 4.3%, Interactive Brokers dropped 2.6%, and Coinbase slipped 2.1% in after-hours trading.
The four new S&P 500 entrants will replace BorgWarner Inc. (BWA), Teleflex Inc. (TFX), Celanese Corp. (CE), and FMC Corp. (FMC) before the start of trading on March 24.
