Prediction: After Datadog's S&P 500 Debut, These Stocks Could Be Next in Line

The article identifies Robinhood Markets, AppLovin, and Cheniere Energy as the top candidates for future S&P 500 inclusion, citing their significant market capitalizations and consistent GAAP profitability, a crucial index requirement. Robinhood, with over $80 billion market cap and $336 million Q1 2025 net income, demonstrates rapid growth and strategic diversification. AppLovin, the largest qualifying U.S. company not yet included with a $115 billion market cap and $576.4 million Q1 2025 net income, exhibits robust adtech growth despite prior short reports. Cheniere Energy, exceeding $50 billion market cap and profitable, benefits from strong LNG demand and long-term contracts, positioning it for future expansion. Inclusion in the S&P 500 typically provides a significant stock price boost due to mandatory purchases by index-replicating funds.

Analysis

Robinhood (HOOD), AppLovin (APP), and Cheniere Energy (LNG) are identified as prime candidates for S&P 500 inclusion, a significant event that typically creates a price tailwind due to forced buying from index-tracking funds. All three companies meet the crucial eligibility criteria of U.S. domicile, substantial market capitalization, and, most importantly, sustained GAAP profitability over the prior quarter and trailing twelve months. Robinhood, with a market cap exceeding $80 billion, demonstrated robust fundamentals with a 50% year-over-year revenue increase to $927 million and $336 million in net income in Q1 2025, driven by product expansion and the strategic $200 million acquisition of crypto exchange Bitstamp. AppLovin, the largest qualifying U.S. company not yet in the index at over $115 billion market cap, posted strong Q1 2025 results with $576.4 million in net income and a 70% surge in advertising revenue, underscoring the success of its AI-powered Axon-2 platform despite previous caution from short reports. Cheniere Energy, with a market cap over $50 billion, is positioned as the next eligible energy major, benefiting from strong LNG demand forecasts and high cash flow visibility, with approximately 95% of its volumes secured by long-term take-or-pay contracts until the mid-2030s.

Key Decisions for Investors

• Investors should consider accumulating positions in HOOD, APP, and LNG ahead of the next S&P 500 rebalancing in September, as a potential inclusion serves as a significant near-term catalyst due to mandatory buying from index funds.
• For AppLovin, monitor for any resolution or dismissal of the issues raised in prior short reports, as this could remove a key obstacle to its index inclusion and unlock further upside.
• Evaluate Robinhood's execution on integrating its Bitstamp acquisition and expanding its AI-driven services, as these strategic moves are diversifying its revenue base beyond retail trading and could sustain its growth trajectory.
• Cheniere Energy offers a compelling case for investors seeking exposure to the energy sector with reduced commodity price risk, given its business model is underpinned by long-term contracts that provide stable and predictable cash flows.