Meet 2 of the Newest Additions to the S&P 500: Apollo Global Management and Workday

The S&P 500, the premier benchmark for U.S. stocks, recently welcomed two new additions: Apollo Global Management (APO) and Workday (WDAY). These companies, with their robust business models and impressive growth, have earned their place among the elite. Let's delve into the factors that contributed to their inclusion and explore their potential as investments.



1. Apollo Global Management: Private Credit and Yield Businesses Drive Growth
Apollo Global Management, a leading global alternative asset manager, has seen its private credit and yield businesses soar. With over $480 billion in assets under management (AUM) allocated to private credit, Apollo has witnessed a staggering $100 billion year-over-year growth, reaching nearly $598 billion in the third quarter of 2023. This growth is fueled by increased demand for private credit as mainstream banks face regulatory pressures, shifting traditional lending to companies like Apollo. Apollo's goal is to double its private credit business to $1.2 trillion AUM over the next five years, further cementing its position in the S&P 500.

2. Workday: Cloud-Based Human Resources Platform Attracts Clients
Workday's cloud-based human resources platform has been a significant driver of its selection for the S&P 500. The platform offers a comprehensive suite of tools, including accounting for CFOs, vendor and contract management, employee onboarding and payment, sales modeling, and strong analytics. This all-in-one solution has enabled Workday to attract a diverse range of clients, including 38% of the Fortune 500, contributing to its steady growth and market cap expansion.



Both Apollo Global Management and Workday have demonstrated impressive earnings growth, surpassing their historical averages and industry peers. Apollo's earnings growth rate of 24% net internal rates of return (IRR) since its inception is significantly higher than the average private equity fund return of around 10%. Workday's revenue growth of 3.6% in the third fiscal quarter of 2025, while slower than previous quarters, still outpaces the industry average of 2.5%.

As of Dec. 14, 2024, APO's P/E ratio is 12.5, while WDAY's is 39.5. Historically, APO's P/E has averaged around 10-12, and WDAY's has been around 35-40. Compared to industry peers, APO's P/E is slightly higher than the average for financial services (around 10-12), while WDAY's is in line with the tech sector's average (around 35-45). Despite their current P/E ratios, both companies offer attractive investment opportunities, given their strong fundamentals and growth prospects.

In conclusion, Apollo Global Management and Workday have proven their mettle and earned their spots in the S&P 500. Their robust business models, impressive earnings growth, and attractive valuations make them compelling investment opportunities. As always, investors should conduct thorough research and consider their risk tolerance before making any investment decisions.