Veeva Systems' stock is soaring upon news that it will soon join the benchmark index.
Veeva Systems may not be a household name, but it's about to get a spot in the S&P 500.
S&P Dow Jones Indices disclosed late Thursday that the life-sciences software company will replace Coterra Energy Inc. in the index before the opening bell on May 7. Coterra is in the process of being acquired by Devon, with the deal due to close soon.
Shares of Veeva were up 9% in after-hours trading Thursday. Marvell Technology's stock was down 1%, with Jefferies trading-desk analyst Jeffrey Favuzza noting that it had been speculated as "the other big tech candidate on the inclusion list."
Veeva isn't an entirely surprising choice for entry into the S&P 500 as the index recently lost a healthcare constituent, Hologic, after a private-equity buyout deal in early April. At the time, S&P Dow Jones Indices chose to sub in convenience-store retailer $Casey's General Stores (CASY) $, rather than another healthcare name.
The index committee has discretion when choosing which companies receive places in the S&P 500, provided that the businesses meet various criteria around market capitalization and profitability. Veeva had a $25 billion market cap as of Thursday's close.
Veeva shares have been beaten down this year as part of a general selloff in the software sector. The stock is off 30.1% over the course of 2026 to date. Only 18 current S&P 500 stocks have fared worse.
The company makes cloud software that helps life-sciences companies manage clinical, commercial and regulatory matters. Tech investors have been generally worried that the software sector is susceptible to AI disruption, but Evercore ISI analyst Kirk Materne recently explored how "vertically aligned software companies," such as Veeva, "may be structurally advantaged as AI adoption matures."
Even within vertical software, which refers to companies focused on a specific sector or market, Veeva stands out because it's "embedded in high-stakes workflows in regulated markets," Materne added.