Nvidia-Backed Powerhouses Crash the S&P 500 Party This Month

The blue-chip club just got a serious tech upgrade.

Two companies riding Nvidia's coattails are about to join the most exclusive index in traditional finance. It's a move that signals where the smart money thinks growth is hiding—and it's not in legacy industrials.

The Index Influx

Forget slow-and-steady. The S&P 500's latest additions are pure momentum plays, vaulted into the benchmark by market cap surges tied directly to the AI hardware boom. Their ascension isn't just a milestone; it's a referendum on the old economy.

What the Entry Really Means

This isn't just about passive fund flows—though billions will follow automatically. It's about validation. Gaining an S&P 500 slot grants instant credibility with institutional managers who still treat ticker symbols like report cards. It mainstreams a narrative built on compute power.

The Cynical Take

Let's be real: this is the index committee playing catch-up, officially blessing a trend that retail traders spotted years ago. It's the financial equivalent of a parent finally admitting their kid's obscure band is actually good—after they've already sold out stadiums.

The door to the old guard's fortress is creaking open. The question now is who follows them through.

Key Takeaways

• Shares of Lumentum and Coherent are rising to start the week following the announcement on Friday that the companies would be added to the S&P 500 later this month.
• Nvidia recently announced $2 billion investments in both companies.
• EchoStar and Vertiv will also be joining the benchmark index.

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Four companies—including two part-owned by AI chip giant Nvidia—are set to join the S&P 500 later this month.

S&P Dow Jones Indices on Friday said Coherent (COHR), EchoStar (SATS), Lumentum (LITE) and Vertiv (VRT) would be added to the benchmark index of U.S. companies before the start of trading on March 23. They'll replace Lamb Weston (LW), Match Group (MTCH), Molina Healthcare (MOH) and Paycom Software (PAYC).

Why This Matters to Investors

Inclusion in the S&P 500 is generally seen as a good thing for a company and its stock, in part because many investors' portfolios include exchange-traded funds that track the index, and those funds must buy shares of the companies in the wake of their addition.

Nvidia (NVDA) earlier this month reported stakes in photonics and laser makers Coherent and Lumentum, giving those companies' shares a boost. Those investments, valued at the time at $2 billion apiece, came on the back of strong performance for both stocks this year.

Shares of Coherent were recently up more than 3%, while Lumentum's shares rose about 11%. Nvidia's shares were up more than 1%. Read Investopedia's full coverage of today's trading here.

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Wall Street analysts generally expect both Lumentum and Coherent to keep rising. The Street's mean price target on the former is particularly bullish, representing about 20% upside to recent prices according to Visible Alpha's survey.

The latest changes were part of a raft of updates S&P Dow Jones Indices announced last week. That included changes to the S&P 100, a subset consisting of the larger companies contained in the broader measure, including the addition of Applied Materials (AMAT), GE Vernova (GEV), Lam Research (LRCX) and Micron (MU), and the removal of American International Group (AIG), Metlife (MET), Paypal (PYPL) and Target (TGT).