The Impact of S&P 500 Index Inclusion on AppLovin and Robinhood: A High-Growth Opportunity?

The S&P 500 index rebalancing in late September 2025 has thrust AppLovin and Robinhood into the spotlight, marking a pivotal moment for two high-growth companies that have long been on the periphery of institutional recognition. Their inclusion—alongside Emcor Group—reflects a broader shift in the U.S. equity market toward embracing fintech and adtech innovators. But what does this mean for investors?

The Short-Term Catalyst: Liquidity, Momentum, and Index-Driven Demand

The immediate impact of S&P 500 inclusion is predictable: a surge in liquidity and a price pop driven by index-tracking funds. AppLovin’s shares jumped 7.4% in post-market trading on September 5, 2025, while Robinhood’s stock rose 7.3% in extended hours, according to a report by CNBC [1]. This “index effect” is not merely a one-day event. As passive funds and ETFs adjust their portfolios to reflect the new index composition, institutional demand for these stocks is expected to intensify. For AppLovin, which now boasts a market capitalization of $169.11 billion [5], the inclusion validates its position as a dominant player in the app advertising ecosystem. Robinhood, with a $91.5 billion market cap [2], gains credibility as a fintech leader in an era of democratized trading and crypto adoption.

The mechanics of index inclusion are clear: funds must buy these stocks to maintain alignment with the S&P 500, creating a self-fulfilling cycle of demand. This dynamic is particularly potent for companies like AppLovin and Robinhood, which had previously been excluded despite their size and influence. As stated by Bloomberg, the addition of Robinhood “marks a watershed moment for the U.S. fintech sector” [4], signaling to investors that the market is evolving to reflect new economic realities.

Long-Term Implications: Market Capitalization, Sector Influence, and Investor Sentiment

The long-term implications are more nuanced. For AppLovin, inclusion in the S&P 500 cements its status as a tech-sector bellwether. The company’s revenue grew 40% year-over-year in 2025 [6], driven by its dominance in mobile advertising and its ability to monetize user engagement. However, its inclusion also raises questions about valuation sustainability. At $169 billion, AppLovin’s market cap dwarfs that of many traditional tech giants, and analysts remain divided on whether its growth story can justify such a premium.

Robinhood’s trajectory, meanwhile, is tied to the broader crypto ecosystem. Its inclusion in the S&P 500—alongside Coinbase and Block—signals institutional acceptance of digital assets as a mainstream asset class [2]. Yet, the company’s long-term success hinges on regulatory clarity and its ability to diversify beyond its commission-free trading model. While Robinhood’s revenue surged 45% year-over-year [6], its reliance on volatile crypto markets and its recent foray into stock lending and margin trading remain risks.

A Comparative Analysis: AppLovin vs. Robinhood

The two companies represent different facets of the tech-finance intersection. AppLovin’s inclusion reflects the maturation of the adtech sector, where data-driven monetization has become a cornerstone of digital economies. Robinhood’s entry underscores the fintech revolution, where platforms are redefining access to capital and investment.

Data from Sherwood News highlights that AppLovin’s post-announcement rally was fueled by its status as the largest new entrant to the index [2], while Robinhood’s gains were driven by optimism around crypto’s mainstream adoption [4]. However, the omission of Michael Saylor’s Strategy—a crypto-focused firm that reportedly met inclusion criteria—raises questions about the S&P’s selection process and whether sector balance, rather than pure merit, dictated the outcome [3].

Risks and Opportunities

For investors, the inclusion of AppLovin and Robinhood presents both opportunities and risks. On the upside, the influx of institutional capital is likely to enhance liquidity and reduce volatility in the short term. Long-term, their ability to sustain growth will depend on their core business models. AppLovin must navigate the challenges of a saturated adtech market, while Robinhood faces regulatory headwinds and competition from established brokers.

Analysts remain cautiously optimistic. Citizens JMP recently raised its price target for Robinhood to $125 from $70, citing the company’s role in the crypto boom [4]. For AppLovin, the focus is on maintaining its edge in a rapidly evolving digital advertising landscape.

Conclusion

The S&P 500 inclusion of AppLovin and Robinhood is more than a symbolic gesture—it is a recalibration of the market’s priorities. For AppLovin, it is a validation of its adtech dominance; for Robinhood, a stamp of approval for the fintech revolution. While the short-term price pops are largely mechanical, the long-term value will depend on each company’s ability to innovate and adapt. Investors should view this as a high-growth opportunity, but with a clear-eyed understanding of the risks inherent in betting on the next wave of tech-finance disruptors.

Source:
[1] AppLovin and Robinhood added to S&P 500, [https://www.cnbc.com/2025/09/05/applovin-robinhood-sp-500.html]
[2] Robinhood to join S&P 500 in watershed moment for US fintech sector, [https://www.marketscreener.com/news/robinhood-to-join-s-p-500-in-watershed-moment-for-us-fintech-sector-ce7d59d9df8bf12c]
[3] BREAKING: Saylor's Strategy Misses S&P 500 Inclusion, [https://www.mitrade.com/au/insights/news/live-news/article-3-1101166-20250906]
[4] Robinhood, AppLovin, and Emcor pop on announcement, [https://sherwood.news/markets/robinhood-applovin-emcor-added-to-s-and-p-500/]
[5] APP Stock Price | AppLovin Corp. Stock Quote (U.S.), [https://www.marketwatch.com/investing/stock/app]
[6] Robinhood Set to Join S&P 500 as Bitcoin Giant Strategy..., [https://finance.yahoo.com/news/robinhood-set-join-p-500-212855353.html]