S&P 500 inclusion, for any stock, is more than just a symbolic milestone – it’s a catalyst for capital inflows, institutional recognition, and often, a sharp rally in share price.
When a company is added to the benchmark index, passive investment funds that track S&P 500 are required to buy its shares, often triggering billions of dollars in trading volume.
On average, US stocks tend to outperform by 6% to 9% the day after the inclusion announcement. Coinbase, for example, soared nearly 24% on the day succeeding its inclusion.
That said, some stocks are compelling candidates for inclusion in the benchmark S&P 500 index this year, according to Stephens.
These include Interactive Brokers Group, Reddit, and Carvana – each offering not just eligibility, but strong fundamentals and strategic reasons to be included as well.
Here’s what the three names have in store for investor in 2025.
Interactive Brokers Group Inc (NASDAQ: IBKR)
Interactive Brokers is the largest financial stock in the S&P 400 MidCap index and prime candidate for migration to the S&P 500.
With a market cap north of $99 billion, IBKR meets all the technical criteria for inclusion.
Its global trading platform spans over 150 exchanges, and its technological edge allows it to operate with industry-leading efficiency – compensation expenses were just 10.8% of net revenues in Q1.
IBKR has expanded aggressively, launching 24-hour trading, crypto access, and new investment vehicles across Europe and Asia – and a 0.55% dividend yield makes Interactive Brokers shares all the more attractive to own for the back half of 2025.
Reddit Inc (NYSE: RDDT)
Reddit has rapidly gained traction among retail investors and advertisers alike – and with a market cap of abut $27 billion, it now meets the S&P 500’s minimum threshold.
The social media firm’s monetisation strategy – centred on targeted ads and premium subscriptions – is beginning to show promise, and its cultural relevance gives it unique moat in communication services.
RDT’s inclusion could also help rebalance the index’s underweight exposure to digital platforms.
While profitability remains a watchpoint, Reddit stock’s growth trajectory and user engagement metrics make it a compelling long-term play.
Carvana Co (NYSE: CVNA)
Carvana has staged a remarkable turnaround, transforming from a near-bankruptcy case into one of the fastest-growing consumer discretionary stocks.
With a market cap of more than $73 billion, the company is now eligible for S&P 500 inclusion.
BofA analysts have recently raised price target to $375, citing improved unit economics, reduced delivery distances, and disciplined cost control.
Carvana has also surprised investors with consecutive profitable quarters, a feat that strengthens its case for index inclusion.
As interest rates fall and used car demand rebounds, CVNA shares are particularly well-positioned to capture both market share and investor attention.
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