DoorDash is set to join the S&P 500, marking a major milestone for the food delivery giant. The move comes as the index committee leans toward more stable selections, with TKO Group Holdings, Williams-Sonoma, and Expand Energy also making the cut ahead of the March 24 market open.
A Strategic Selection Process
The S&P 500 isn’t just a list of the biggest companies by market capitalization. There are specific criteria—profitability, float, and sector balance—that influence which companies make the cut. This time, the committee appears to have opted for steadier names over high-volatility candidates.
DoorDash, the largest of the new entrants, had a strong 2024, gaining 70% in stock value. Its recent profitability made it eligible for inclusion. Alongside DoorDash, TKO Group Holdings (which owns WWE and UFC), home furnishings retailer Williams-Sonoma, and energy company Expand Energy will also be added.
Why DoorDash Made It—And Others Didn’t
Some big names were rumored to be in the running but didn’t make the final list. AppLovin, an app-monetization company, was a strong contender but was left out, possibly due to its extreme stock swings and recent scrutiny from short-sellers. Despite a 700% surge in 2024, its stock has seen a more turbulent start to 2025.
Another name that investors speculated on was Coinbase. The cryptocurrency trading platform has been a hot stock, rising over 500% since late 2022. However, crypto’s regulatory uncertainties likely played a role in keeping it out of the S&P 500 this time.
Meanwhile, past selections show that the committee’s choices don’t always pay off immediately. Super Micro Computer, which joined the index last year, saw its stock price drop by more than half after inclusion due to concerns about financial controls and competitive pressures.
Market Reactions to the New Additions
Stocks often jump when they’re added to the S&P 500 because index funds that track it must buy shares. That effect was on full display in after-hours trading on Friday:
- DoorDash shares rose 6%.
- TKO Group climbed 2.4%.
- Williams-Sonoma gained 1.6%.
- Expand Energy moved up 2.3%.
On the flip side, companies that were snubbed saw their stocks take a hit. AppLovin dropped 4.3%, Interactive Brokers fell 2.6%, and Coinbase slid 2.1%.
The Companies Being Replaced
With four new entrants coming in, four existing S&P 500 companies are on their way out. BorgWarner, Teleflex, Celanese, and FMC Corp. will be removed before trading starts on March 24.
This reshuffle highlights the balancing act the index committee faces. It must ensure the S&P 500 remains an accurate representation of the market while avoiding stocks with extreme volatility. DoorDash’s entry signals that, at least for now, steadier picks are winning out over high-risk, high-reward names.
