Reddit lands in the S&P 500 still down 42% from its September peak

Reddit will be added to the S&P 500 before the start of trading on August 18. J.P. Morgan estimates the change will force index funds to buy 16.7 million of its shares.

The stock soared more than 11% Friday after S&P Dow Jones Indices confirmed the move.

S&P additions trail the benchmark by 2% after three months

Since its debut in March 2024, Reddit (RDDT) has traded an average of 5.98 million shares per day. Passive funds have to buy 16.7 million shares, or close to three full sessions of normal activity crammed into the rebalance.

Shares were near $175.69, and more than $201 million of the stock had already changed hands by 9:32 a.m. ET Friday. A later intraday quote had Reddit up 14.55% at $181.12.

Analyst Melissa Roberts at Stephens said new additions to the S&P 500 have historically outperformed the index from the announcement to the actual inclusion, with the biggest move coming the day after the news.

Once a stock is in, those gains tend to dissipate, she said, and additions have trailed the benchmark by about 2% in the three months following.

Reddit is taking over the seat of AvalonBay Communities (AVB). The apartment landlord is exiting the index after an all-stock merger it agreed to in May with Equity Residential (EQR).

That tie-up carries an enterprise value of ~$69 billion and is expected to close in the second half of 2026.

S&P Dow Jones Indices said the merged business, to be called Vivmark Residential, will retain AvalonBay’s spot in the S&P 500 once the deal closes.

Reddit posted $253 million in profit and still fell 31% this year

Reddit joins the benchmark after a tough year. The stock is down more than 31% in 2026 as of Thursday’s close and is more than 42% off the all-time high it hit in September 2025.

The company reported second-quarter net income of $253 million on revenue of $805 million, up 61% year over year and its eighth consecutive quarter of growth over 60%, Cryptopolitan reported.

The social media platform raised its revenue outlook, but late in the period, choppy search-engine referrals hit US user growth.

“Visibility into referral traffic remains low,” CEO Steven Huffman told analysts, adding that Google’s AI overviews have not yet replaced the traditional search links Reddit leans on.

Reddit joins an index that is increasingly dominated by only a few big names in technology.

Stocks linked to AI now represent ~45% of the market value of the S&P 500, making the benchmark more vulnerable to fluctuations of a handful of firms, Cryptopolitan previously reported.

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