To The Moon

As someone observing the recent news about AppLovin $AppLovin Corporation(APP)$  and Robinhood $Robinhood(HOOD)$   joining the S&P 500 $S&P 500(.SPX)$  , I find it fascinating to see how these companies are gaining such prominence. Robinhood's popularity among retail investors, especially with meme stocks like AMC Entertainment and GameStop, has clearly driven its stock to rise over 200% this year. This surge reflects a strong community backing, which could give it a unique edge in the index. On the other hand, AppLovin's impressive gains—278% in 2023 and over 700% in 2024—show its strength in the ad tech space, though its 68% increase so far in 2025 suggests a potential slowdown.

When comparing their business models for staying power within the S&P 500, I lean toward AppLovin having a slight advantage. Its software, which delivers targeted ads to mobile apps and games, taps into a growing and resilient digital advertising market. Robinhood, while innovative with its commission-free trading platform, relies heavily on the volatile sentiment of retail investors and meme stock trends. This dependency might make it more susceptible to market shifts, whereas AppLovin's steady revenue from ad tech could provide more stability over time.

Regarding the first question about which business model has more staying power, I think AppLovin's approach might hold up better due to its diversified client base in the mobile gaming and app ecosystem. Robinhood's success, while impressive, seems tied to the enthusiasm of a specific investor group, which can be unpredictable. However, Robinhood's inclusion could still attract more institutional interest, potentially bolstering its position if it diversifies its offerings beyond meme stocks.

On the second question about whether I see the index inclusion as a long-term signal or a "sell the news" event, I'm inclined to view it with caution. Historically, S&P 500 inclusions often lead to short-term price spikes as funds adjust their portfolios, which could be a "sell the news" opportunity if the hype fades. That said, for companies with solid fundamentals like AppLovin, it could signal long-term growth if they continue to innovate. Robinhood's case might lean more toward a short-term boost given its reliance on retail momentum.

Looking at the data, AppLovin's performance in 2023 and 2024 suggests it has momentum that could carry forward, even with the slower 2025 start. Robinhood's 200% rise this year is remarkable, but its sustainability depends on maintaining investor enthusiasm. I'd watch their quarterly earnings closely to see if these trends hold, as that could clarify their long-term potential within the index.

Ultimately, I see this as an exciting moment for both companies, but I'd approach it with a balanced perspective. AppLovin might offer more stability, while Robinhood could be a riskier but potentially rewarding play. If I were to decide, I'd consider holding AppLovin for the long term and treating Robinhood's inclusion as a short-term trading opportunity!

@TigerStars  @Tiger_comments