Datadog Inc. (NASDAQ:DDOG) shares are trading higher Thursday after S&P Dow Jones Indices announced the company will be added to the S&P 500 index next week on Wednesday.
What To Know: The inclusion follows the completion of Hewlett Packard Enterprise's acquisition of Juniper Networks, which Datadog will replace in the benchmark index. The adjustment is scheduled to take effect before the market opens on July 9.
Shares of Datadog rose more than 9% in after-hours on Wednesday trading following the announcement. The move comes as investors anticipate increased demand for the stock from index-tracking funds and institutional portfolios that are required to reflect the S&P 500's composition.
Meanwhile, other companies that had been speculated as potential S&P 500 candidates, such as Robinhood Markets, AppLovin, Interactive Brokers and Carvana, saw a modest pullback after the news. Robinhood in particular declined more than 2% after hours, erasing some of its earlier gains from Wednesday's regular session.
The index change caps off a multi-week period of speculation among analysts and investors over which company would fill Juniper Networks' spot. Now that the decision is final, Datadog is poised to see a shift in shareholder composition and could see higher daily volume leading up to and following the index change.
DDOG Price Action: Datadog shares were up 13.6% at $153.33 at the time of writing, according to Benzinga Pro.
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