Analysts at Keefe, Bruyette & Woods (KBW) predict Rocket Companies and Affirm Holdings are strong candidates for inclusion in the S&P 500 Index, driven by anticipated index changes and merger-related vacancies. Rocket is noted as the largest eligible financial stock, while Affirm is a leading fintech contender. Inclusion in the benchmark typically boosts share demand from index-tracking funds.
Keefe, Bruyette & Woods (KBW) analysts suggest that Rocket Companies and Affirm Holdings are top contenders for addition to the S&P 500 Index. Upcoming index adjustments, including potential vacancies from mergers, are creating opportunities for new constituents. The boutique investment bank anticipates nine merger-related changes across the broader S&P 1500, which includes the S&P 500, S&P Midcap 400, and S&P Smallcap 600 indexes.
KBW highlights Rocket Companies as the sixth-largest eligible firm for the S&P 500 and the leading financial stock among eligible candidates. The firm, a division of Stifel Financial, assigns a medium probability for Rocket's inclusion during the third-quarter rebalancing and a medium-to-high probability over subsequent quarters. Affirm, a prominent buy now, pay later fintech company, also holds a medium probability of being added to the S&P 500 during the forthcoming rebalancing period.
Historically, inclusion in benchmark indexes like the S&P 500 typically spurs demand for a company's shares, as index-tracking investment funds are compelled to purchase stock in newly added firms. Recent additions to the S&P 500, effective June 22, included chipmaker Marvell Technology, vital for AI infrastructure, and electronics contract manufacturer Flex. These companies replaced Pool Corp and Campbell's Company.
