MW Apollo and Workday rally on news they'll join the S&P 500. Their stock performance has diverged this year.

By Bill Peters

S&P Dow Jones Indices said the moves 'are more representative of the large-cap market space'

Shares of investment firm Apollo Global Management Inc. and workplace cloud-services platform Workday Inc. rallied after hours on Friday, after S&P Dow Jones Indices said the two companies would join the S&P 500 index later this month.

Shares of Apollo $(APO)$ gained roughly 6% in extended trading, while Workday (WDAY) shares jumped more than 8%.

Their addition to the benchmark large-cap index SPX will take effect before the start of trading on Dec. 23, with the two companies replacing Qorvo Inc. $(QRVO)$, which makes components for mobile devices and other electronics, and engineering-services firm Amentum Holdings Inc. $(AMTM)$ on the S&P 500.

In a statement, S&P Dow Jones Indices said the additions to the index "are more representative of the large-cap market space."

Qorvo's stock was down 1.4% after hours, while Amentum was losing 2%.

The addition of Workday, which has a market cap of $69.9 billion, to the S&P 500 follows a wobbly performance for its stock. As of Friday's close, Workday shares are down 3.5% so far this year. But after the company's quarterly results last month, some analysts still found things to like.

"The company continues to win new enterprise business and take advantage of international and AI growth opportunities," D.A. Davidson analyst Will Jellison said in a research note last month.

Meanwhile, shares of Apollo, as of Friday's close, have run more than 90% higher this year. After the investment firm, whose market value stands at roughly $99 billion, reported third-quarter earnings last month, J.P. Morgan analysts said the firm "continued to deliver impressive results."

"We view Apollo as a leading alternative asset manager, with its $696 [billion] of [assets under management] ranking second among publicly traded U.S.-based asset managers (after Blackstone)," the analysts said in their investment thesis on the company.

"Apollo has grown faster than peers in recent years, in part driven by its first-mover advantage of understanding the opportunity set around establishing insurance partnerships to help drive fee-related earnings," the analysts noted.

-Bill Peters

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December 06, 2024 19:03 ET (00:03 GMT)

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