Datadog (DDOG, Financials) shares jumped nearly 9% in premarket trading Thursday after S&P Global announced the software company would be added to the S&P 500 index on July 9.
The inclusion follows Hewlett Packard Enterprise’s (HPE, Financials) completed acquisition of Juniper Networks, which created an opening in the benchmark index. Joining the S&P 500 often boosts a stock’s visibility; it typically attracts passive fund inflows and expands exposure to institutional investors.
Datadog entered Thursday’s session down about 5% year to date; the stock is now on track to erase earlier losses from February, when weak guidance sent shares tumbling.
Robinhood (HOOD, Financials), which had rallied on speculation that it might replace Juniper in the index, fell 3% in early trading. The pullback came after investors rotated expectations toward Datadog; HOOD had hit a record high Wednesday.
Datadog will be the latest in a string of new S&P 500 entrants tied to corporate reshuffling; Coinbase (COIN, Financials) was added in May following Capital One’s merger with Discover Financial.
Datadog provides monitoring and analytics software for cloud infrastructure; the company has been a favorite among growth investors, especially during the early phases of the AI buildout.
Shares are scheduled to officially enter the index at market open on July 9.
This article first appeared on GuruFocus.
