Being added to the S&P 500 Index is a major milestone for a company’s stock.

Fund managers are required to buy the stock, leading to a surge in orders and increased attention. Investing early in a stock before inclusion can result in high returns.

Companies must meet criteria like a market cap over $12.7 billion and 4 consecutive GAAP positive earnings to qualify.

Super Micro Computer (SMCI)  and e.l.f. Beauty (ELF) are potential candidates for the index this year.

Super Micro Computer has outperformed the market with AI server demand, while e.l.f. Beauty shows strong growth in ethical beauty products. 

Other potential candidates include Palantir Technologies (PLTR) , Workday Inc. (WDAY) and TradeDesk (TTD)