Market Observations

Where to? The S&P 500®

Market Observations Article
December 2023

Authors & Contributors

Uber Technologies has made its arrival into the S&P 500®. We offer details about the impact the addition is having on the index and stock market.

Uber Technologies has made its arrival into one of the most widely followed US indices. On December 18, the provider of ride-hailing services, food delivery and freight transport joined the benchmark S&P 500® Index. 

Prior to joining the S&P 500, Uber—worth nearly $127 billion—was recognized as the largest market-cap weighted company not included in the popular index. Bear in mind, S&P 500 benchmark methodology is not entirely rules-based; inclusion in the index is at the discretion of the US Index Committee1 and based on eligibility that considers financial viability alongside other criteria.

Consistent profitability prevented Uber from qualifying for inclusion in the S&P 500 sooner. The company recorded its first-ever operating profit since its inception in the second quarter of 2023. For third quarter 2023 earnings,2 Uber executives touted further growth potential as the company reported that trips and monthly active platform consumer growth increased 25% and 15%, year over year, respectively.

Ready to Go

While joining the S&P 500 marks a significant turnaround for Uber since its pandemic-era struggles, it doesn’t mean the company is ready to join the ranks of the “Magnificent Seven” stocks at the top. However, inclusion in the S&P 500 does mean that exchange-traded funds (ETFs) and mutual funds that track the benchmark had to purchase this new stock upon its entry into the index, which affects valuations.

Shares of Uber reached a more than two-year high after S&P Dow Jones Indices (S&P DJI) made the December 1 announcement that the company would join the S&P 500 Index. It is estimated that Uber will add more than $16 billion to the index.3 The company’s stock was up 9.05% since December 4—the first trading day after the S&P DJI announcement. Shares of the company are now slightly below their all-time high, which was reached in February 2021.

S&P 500® Index Performance

Note: Uber Announcement: 12/1/2023. Source: Piper Sandler; data as of December 14, 2023.

A Major Liquidity Event 

Uber’s addition to the S&P 500 is part of a quarterly rebalancing. The S&P 500 typically rebalances once a quarter—in March, June, September and December—to ensure that the index accurately represents the US market. In addition to Uber, manufacturing firm Jabil Inc. and building materials supplier Builders FirstSource Inc. joined the S&P 500 as part of the December 2023 rebalance. Sealed Air Corp., Alaska Air Group and SolarEdge Technologies Inc. were removed from the index during the rebalance.

Traders refer to this type of rebalancing as a major liquidity event because of the large volume trading in the stock market.

1 S&P Dow Jones Indices,

2 Uber Financials,

3 Source: Piper Sandler


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