Veeva Systems' stock surged 10.92% during extended trading sessions, marking a significant upward movement for the healthcare technology company.

The sharp rise follows the announcement that Veeva Systems will join the S&P 500 index, replacing Coterra Energy which is being acquired by Devon Energy. The change is effective prior to the market opening on May 7, according to S&P Dow Jones Indices.

Inclusion in the benchmark S&P 500 index typically drives increased buying from index funds and ETFs that track the index, while also enhancing the company's visibility and credibility among institutional investors. Veeva, a life-sciences software company with approximately $25 billion market capitalization, will become the newest member of the prestigious index.