Analysts' prediction: these two stocks could join the S&P 500 in 2025

The S&P 500 Index is one of the most respected and widely followed indicators of the performance of the U.S. stock market. It consists of the 500 largest and most financially strong U.S. companies. To be included in this prestigious index, a company must meet strict criteria, including market capitalization size and stable profitability.

According to analysts, two companies that have built strong market positions in recent months - AppLovin and The Trade Desk - could make the index in 2025.

AppLovin $APP: Quiet growth in mobile advertising

AppLovin is one of the fastest growing companies in mobile advertising. The company has experienced tremendous growth in 2024, with its stock up 789% year-to-date. This great performance is primarily the result of strong revenue growth, which grew 39% to $1.2 billion in the third quarter. The company's main growth driver is its investment in artificial intelligence, particularly its Axon platform, which optimizes ad placement and increases ROI for its customers.

With a market capitalization of over $107 billion, AppLovin is among the 100 largest companies in the U.S. by market value, making it a strong candidate for inclusion in the S&P 500. Even if its valuation declines, its growing trends and financial performance will likely warrant its place in the index.

The Trade Desk $TTD: Leader in advertising and campaign management

Another company that could soon be part of the S&P 500 is The Trade Desk. This advertising technology player is considered a leading ad campaign management platform, with a focus on areas like Connected TV (CTV) and retail advertising. The company has gained a strong position with tools that help brands and ad agencies optimize campaigns across multiple platforms.

In 2024, The Trade Desk reported solid growth, with revenue up 27% and GAAP net income jumping 141% to $94 million. The company is known for its high customer satisfaction, which is reflected in its high client retention rate of around 95%. With a market capitalization of $62.3 billion, The Trade Desk would be among the 200 largest companies in the S&P 500.

Why is inclusion in the S&P 500 important?

Inclusion in the S&P 500 is not just a matter of prestige. When stocks are added to the index, funds that track the index must buy those stocks. For example, ETFs like the Vanguard S&P 500 ETF manage more than $1 trillion, which means that for every new stock in the index, there is an average investment of more than $2 billion. This process typically leads to significant increases in the stock prices of new index members.

The S&P 500 rebalances every quarter, and the first opportunity for these companies to get into the index will be in March 2025.

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