CrowdStrike stock climbs after S&P 500 inclusion announcement

S&P Dow Jones Indices announced on Friday that CrowdStrike (NASDAQ:CRWD) will join the S&P 500 index on June 21, following the stock's recent GAAP profitability.

The move, which comes as part of S&P 500’s quarterly rebalancing, reflects CRWD's improved fundamentals, driven by “increased focus on balancing growth and operating efficiency over the past few years,” JPMorgan analysts said in a note.

“While we view the inclusion in the index as a positive, we prefer to view the milestone as a reflection of improving quality over the long term, rather than a long-term catalyst,” they added.

Analysts believe that despite macro and other factors, CRWD is expected to trade up on the news of its inclusion in the S&P 500 index. However, they caution that the impact on CRWD stock will likely be short-lived.

“According to our Global Quantitative and Derivatives Strategy team, upon announcement of inclusion in the S&P 500 index, stocks could gain approximately 5.6% immediately (before the next day open),” the team wrote.

“However, most of the price increase tends to revert by the actual inclusion date which is the date when index tracking funds will purchase the addition.”

CRWD shares were up 5.2% in premarket trading Monday, at the time of writing.

Alongside CrowdStrike, private-equity giant KKR&Co (NYSE:KKR). and web host GoDaddy (NYSE:GDDY) will also join the S&P 500 index at market open on June 24.