GoDaddy joins the elite: a milestone entry into the S&P 500

The S&P Dow Jones Indices announced that GoDaddy will be included in the S&P 500 index, effective before the opening of trading on June 24, 2024. This shift is part of the index’s quarterly rebalancing, a process designed to ensure that the S&P 500 continues to represent the leading companies in the large-cap market.

GoDaddy will replace Illumina Inc. (NASDAQ: ILMN) in the S&P 500, with Illumina moving to the S&P MidCap 400. Alongside GoDaddy, cybersecurity firm CrowdStrike (NASDAQ: CRWD) and private-equity giant KKR & Co. Inc. (NYSE: KKR) will also join the S&P 500, replacing Robert Half Inc. (NYSE: RHI) and Comerica Inc. (NYSE: CMA).

Market reaction

Following the announcement, GoDaddy’s stock experienced a notable uptick. Shares of GDDY jumped in after-hours trading as index funds, which track the S&P 500, began preparations to add the stock to their portfolios. As of the Monday following the announcement, GoDaddy’s stock had risen by 2.2% and has shown an impressive increase of 38.3% since the beginning of the year.

Implications for GoDaddy

Increased Visibility and Credibility: Being part of the S&P 500 enhances GoDaddy’s visibility and credibility among investors. This inclusion signifies recognition of the company’s market capitalization and stability, aligning it with some of the most influential companies in the U.S.

Investor Interest: With GoDaddy’s entry into the S&P 500, the stock is expected to attract more interest from institutional investors and index funds, potentially leading to increased liquidity and stock price appreciation.

Market Dynamics: The change is part of a broader realignment within the S&P 500, aimed at better representing the current market dynamics. CrowdStrike, KKR, and GoDaddy are seen as more representative of the large-cap range, reflecting the evolving landscape of the technology and financial sectors.

The inclusion in the S&P 500 is a testament to GoDaddy’s successful growth strategy and its prominent role in the internet domain and web hosting market. Investors will be keenly watching the stock as the official inclusion date approaches, with expectations of further positive momentum.

Conclusion

GoDaddy’s entry into the S&P 500 is a landmark achievement that underscores the company’s growth and strategic importance in the tech industry. This move not only boosts GoDaddy’s market presence but also positions it for continued success and investor interest. As the company prepares for this transition, all eyes will be on its performance and the broader implications for the market.