Interactive Brokers (IBKR) shares closed slightly higher on Tuesday following news the brokerage firm will become a component of the S&P 500 Index ($SPX) on Aug. 28.
The company known for its online trading platform will replace Walgreens Boots Alliance (WBA), which will soon go private as part of its $23.7 billion buyout agreement with Sycamore Partners.
Interactive Brokers stock has been on a tear in recent months, having returned roughly 90% since early April.
Why Index Inclusion Is a Big Deal for Interactive Brokers Stock
Joining the S&P 500 is meaningfully positive for IBKR stock mostly because of the “index effect.”
Once a company becomes a part of the benchmark index, a large number of passive funds, such as ETFs and mutual funds, that track the S&P 500 often load up on its shares to replicate the index’s composition.
This creates a sudden, significant increase in demand, which typically results in a material increase in the stock price.
Moreover, index inclusion boosts Interactive Brokers’ prestige and visibility among a wider range of institutional investors. This added exposure may lead to more investment and higher valuation over time.
What Else Could Drive IBKR Shares Up in the Back Half of 2025
According to Benjamin Budish, a senior Barclays analyst, Interactive Brokers shares are attractive as a long-term holding for reasons well beyond index inclusion.
Budish sees IBKR as uniquely positioned to capitalize on increased trading activity amid volatile markets.
In his latest research note, the analyst said Interactive Brokers is poised for sustainable growth as its tech-driven platform is winning over retail and institutional clients en masse.
Barclays’s “Overweight” rating on the brokerage firm comes with a price objective of $73, indicating potential upside of more than 15% from current levels.
A 0.51% dividend yield makes IBKR stock even more attractive to own for income investors.
How Wall Street Recommends Playing Interactive Brokers
While not as bullish as Barclays, other Wall Street firms are also constructive on IBKR shares for the second half of 2025.
The consensus rating on Interactive Brokers stock currently sits at “Strong Buy” with the mean target of nearly $67 suggesting potential upside of another 8% from here.
