Robinhood Markets (NASDAQ: HOOD) and AppLovin (NASDAQ: APP) have finally joined the S&P 500 Index on Sept. 8, after much anticipation. Both companies entered 2025 with market capitalizations of $33 billion and $109 billion, respectively, making their inclusion inevitable due to their strong financial performance.

Shares of Robinhood and AppLovin surged by nearly 16% and 12%, respectively, in reaction to the news of their S&P 500 inclusion. This positive market response reflects the validation of their underlying businesses, as both companies have consistently shown GAAP profitability in recent quarters.

The inclusion of Robinhood and AppLovin in the S&P 500 highlights their strong financial performance, with both companies reporting positive GAAP net income over multiple consecutive quarters. This consistent profitability sets them apart from other stocks like Strategy (NASDAQ: MSTR), which has shown variability in its GAAP net income.

The anticipation of substantial buying from financial firms like BlackRock and Vanguard, who operate passively managed funds tracking the S&P 500, has boosted the shares of Robinhood and AppLovin. Active managers are also likely to adjust their holdings to include these newly added stocks, further driving demand.

While the S&P 500 inclusion is a significant win for Robinhood and AppLovin, the long-term trajectory of these stocks will depend on their ability to sustain impressive earnings and business growth. Market anticipation may have already priced in many near-term benefits, but inclusion in the S&P 500 solidifies their position among top U.S. stocks.

Read more at Nasdaq: Part of the Club: Robinhood & AppLovin Soar on S&P 500 Inclusion