Robinhood Stock and Applovin Face Reality Check on S&P 500 Omission – Buy the Dip?
Robinhood shares have increased by more than 250% in just two months, but euphoria was dampened when the stock was excluded from the most...
Quick overview
- Robinhood shares have surged over 250% in two months, reaching an all-time high of $77.77 before a recent dip.
- Investor excitement waned after Robinhood was excluded from the latest S&P 500 inclusion list, leading to a 7% drop in stock price.
- Despite the short-term setback, analysts remain optimistic about Robinhood's long-term prospects and potential future inclusion in the S&P 500.
- The company's strong quarterly results and share repurchase program continue to support its positive outlook and investor interest.
Robinhood shares have increased by more than 250% in just two months, but euphoria was dampened when the stock was excluded from the most recent S&P 500 inclusion list.
Explosive Rally Fueled by Profits and Buybacks
Robinhood Markets Inc. (NASDAQ: HOOD) has been one of Wall Street’s standout stories in recent months. From trading under $30 in early April, the stock skyrocketed past $75 last week, powered by strong quarterly results, a robust share repurchase program, and bullish sentiment around a possible inclusion in the S&P 500. HOOD closed last week with a 13% gain after briefly touching $77.77—a fresh all-time high and a clean break above its January 2025 peak.
Investor enthusiasm surged on mounting speculation that Robinhood might be tapped for the S&P 500 benchmark. Analysts from both Barclays and Bank of America had forecasted its inclusion, fueling a wave of buying as index fund managers and passive investors positioned themselves for what seemed to be a highly anticipated move.
Sell-the-News Reaction Follows S&P Exclusion
However, the optimism cooled rapidly at the start of this week. When S&P Dow Jones Indices released an update confirming no new additions to the benchmark index, shares of Robinhood opened with a sharp downside gap. The stock dropped from $71.36 to an intraday low of $69.31, before settling at $69.95—a 7% dip from the prior close.
Hood Stock Chart Daily – Still Trading Above Resistance
Although HOOD has since clawed back some ground, now hovering around $71, the price action suggests a typical “sell-the-news” pattern. AppLovin Corp. (NASDAQ: APP), another contender for index inclusion, also faced selling pressure today after being left off the list. APP stock, while still up year-to-date, has pulled back significantly from its February high of $417.89.
Index Inclusion Still a Long-Term Catalyst
Despite the immediate disappointment, the broader outlook for Robinhood remains optimistic. Year-to-date, the stock is still deep in positive territory, supported by structural improvements in profitability and growing trading volumes. Many analysts continue to view S&P 500 inclusion as a “when,” not “if,” scenario—particularly if the company sustains its financial momentum.
AppLoving Stock hart Daily – Trading Around $400
Inclusion in the S&P 500 typically triggers increased institutional buying as index-tracking funds are required to purchase shares. It also provides higher visibility among global investors, further boosting demand and potentially reducing volatility over time.
Conclusion: Robinhood’s exclusion from the S&P 500 this time may be a short-term setback, but it doesn’t overshadow the company’s dramatic turnaround and surging stock price. With earnings momentum, expanding margins, and continued investor interest, HOOD remains a strong candidate for future inclusion—and the recent pullback might simply be a breather before the next leg up.
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