Investors of social media company Reddit (NYSE: RDDT) received great news last week: it will be joining the S&P 500 index on Aug. 18. The index includes the top companies on U.S. markets. For a stock to make it onto the index, it's a sign of its size, success, and profitability.
Shares of Reddit jumped on the news last week. However, on a year-to-date basis, they're still down 23%. At around $178, they're also roughly 37% below their 52-week high of $282.95.
Could this news send them soaring back to those levels? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia.
For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue » It's a big deal for a stock to be added to the S&P 500. Many funds track the index, and when a stock is added to it, they have to buy it to ensure they match its composition.
Thus, there will be new purchases of the stock, potentially lifting its share price in the process. Many investors buy S&P 500 index funds as a way to gain exposure to the overall market, as it gives them diversification across many sectors. Stocks that get added to the index usually experience increases in their share prices afterward.
Reddit, which has been having a lackluster year in 2026, may have more room to rise higher in the near term. At around $34 billion in market cap, Reddit isn't fairly large when it comes to the tech sector. The company is, however, experiencing tremendous growth and may grow significantly more over the years.
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