Two Nvidia-Supported Firms Will Be Added to the S&P 500 Before the End of This Month

Main Highlights

• Lumentum and Coherent stocks are climbing at the start of the week after news broke on Friday that both will soon be included in the S&P 500 index.

• Nvidia has recently committed $2 billion in investments to each of these companies.

• EchoStar and Vertiv are also set to be added to the S&P 500.

Four companies, two of which have partial ownership by Nvidia, are scheduled to join the S&P 500 index later this month.

According to S&P Dow Jones Indices, Coherent (COHR), EchoStar (SATS), Lumentum (LITE), and Vertiv (VRT) will be added to the leading U.S. stock index before trading opens on March 23. These additions will take the place of Lamb Weston (LW), Match Group (MTCH), Molina Healthcare (MOH), and Paycom Software (PAYC).

Investor Impact

Being included in the S&P 500 is typically positive for a company and its stock price. This is partly because many investment funds that track the index are required to purchase shares of newly added companies, which can drive up demand.

Earlier this month, Nvidia (NVDA) disclosed significant investments in Coherent and Lumentum, both leaders in photonics and laser technology. Each investment was valued at $2 billion, following strong stock performance from both companies this year.

Recently, Coherent’s stock price increased by over 3%, while Lumentum surged about 11%. Nvidia’s shares also saw a gain of more than 1%.

Most Wall Street analysts remain optimistic about the future of both Lumentum and Coherent. In particular, the consensus price target for Lumentum suggests a potential 20% increase from current levels, according to Visible Alpha’s data.

These index changes are part of a broader set of updates announced by S&P Dow Jones Indices last week. Adjustments to the S&P 100, which highlights the largest companies in the index, include the addition of Applied Materials (AMAT), GE Vernova (GEV), Lam Research (LRCX), and Micron (MU), while American International Group (AIG), Metlife (MET), Paypal (PYPL), and Target (TGT) will be removed.