Reddit Joins S&P 500 as Firm Expands Presence in U.S. Markets

NEW YORK — Reddit is joining the S&P 500, adding the online discussion platform to one of the most closely watched measures of U.S. stock markets.

Reddit’s inclusion took effect before trading began Tuesday, Aug. 18. The company replaces AvalonBay Communities, which S&P 500 member Equity Residential is acquiring.

The move will give Reddit more exposure to institutional investors, as many mutual funds and exchange-traded funds track the S&P 500 or use it as a benchmark. Index funds, which are designed to track the index, typically adjust their holdings when companies are added or removed.

Reddit shares soared 12.6% on Friday after the news of the index addition, but the stock's performance may not reflect the index addition.

A number of factors, including market cap, liquidity, public trading history and profitability, determine membership in the S&P 500. Since its IPO in 2024, Reddit has a track record of quarterly revenue growth and profitability.

The company’s recent results helped make the argument for inclusion. Reddit reported $805 million in revenue for the second quarter, up 61% from the same period a year ago. Net income totalled $253 million, more than double the level from a year ago.

Reddit also said it had 130.3 million daily active unique users and 514.6 million weekly active unique users during the quarter, highlighting that more people are using its service.

The addition comes as investors continue to evaluate whether Reddit can sustain its rapid growth while navigating changes in internet traffic, advertising and the broader digital media market.

For Reddit, joining the S&P 500 is a milestone less than three years after its public debut. The change means the company’s stock will be added to a benchmark that plays a central role in the portfolios of funds that track large U.S. companies, a change that could impact investors.

The inclusion does not guarantee future gains for Reddit’s shares. The company’s ability to grow its business, and its financial performance and user growth, will matter for its longer-term performance.