AppLovin Stock Pulls Back Late Friday Following S&P 500 Snub: Retail Stays Bullish

Index inclusion is typically positive, as funds holding portfolios mirroring the index buy stocks to maintain the respective weightings of the component stocks.

Shares of AppLovin Corp. ($APP) retreated in Friday’s after-hours session after S&P Dow Jones Indices gave the company a miss in its latest quarterly rebalance of the broader S&P 500 Index.

Palo Alto, California-based AppLovin, a software-based platform developer for advertisers to enhance marketing and monetization of content, was left off the list of the companies that would be part of the S&P 500 Index following the index’s quarterly rebalancing, which was announced Friday.

S&P Dow Jones Indices said Apollo Global Management, Inc. ($APO) and Workday, Inc. ($WDAY) will replace Qorvo, Inc. ($QRVO) and Amentum Holdings, Inc. ($AMTM), respectively, in the S&P 500 Index, effective before the market open on Monday, Dec. 23.

AppLovin and Coinbase Global, Inc. ($COIN) were widely expected to be included in the index ahead of the announcement, given these companies were among the ones with the largest market capitalizations and yet were not part of the index.

The prestigious S&P 500 Index, a market-cap weighted index, is considered the best single gauge of large-cap U.S. equities. It includes 500 leading companies, accounting for about 80% of the available market capitalization. 

Index inclusion is typically positive, as funds holding portfolios mirroring the index buy stocks to maintain the respective weightings of the component stocks. These stocks also benefit from increased volume and liquidity due to purchases by index funds and ETFs.

S&P Dow Jones Index rebalances its flagship market-capitalization index series once a quarter.

AppLovin shares climbed 5.92% to $401.50 during Friday’s regular session as traders factored in an S&P 500 inclusion. That was not to be, and the stock pulled back in the after-hours session, settling down 3.86% at $385.99.

Sentiment toward AppLovin shares remained bullish on Stocktwits (57/100) despite the snub, but the degree of bullishness toned down from a day ago. Message volume remained ‘normal.’

A Stocktwits user said the stock could see an extended rally from current levels, citing strong fundamentals.

The stock has gained over 900% for the year-to-date period.

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