There will be a new stock in the S&P 500, it has already soared 11%. Is it worth buying?

The broad index of shares of America S&P 500 will include securities of the developer of software for the biomedical industry Veeva Systems. This was reported in the committee S&P Dow Jones Indices, which creates and calculates stock indexes, writes MarketWatch. On the news, Veeva shares rose 11% on the premarket on May 1.

Veeva will officially enter one of the U.S. benchmark indices before the opening of trading on Ma. 7, replacing the securities of energy concern Coterra Energy, which is being absorbed by Devon Energy Corporation (their deal became known in Ma).

The choice of Veeva to join the S&P 500 was not a complete surprise to the market, MarketWatch points out. Back in early April, a broad index of U.S. stocks lost one representative of the healthcare sector - Hologic was bought out by a private equity firm. However, then the S&P Dow Jones Indices committee decided not to look for a direct replacement in the same industry, and included retailer Casey's General Stores in the index.

The Index Committee independently selects companies for the S&P 500 based on strict criteria. The main ones are market capitalization of at least $22.7 billion, high liquidity of shares and mandatory profitability according to GAAP standards (American financial reporting system). At the close of trading on April 30, Veeva's capitalization was $25 billion.

Shares of companies often rise when included in major stock indexes, as fund managers who focus on benchmarks purchase these securities to align their portfolios with the changes, CNBC explains. Over the past year, the S&P 500 has already added tech names such as AppLovin, Datadog, DoorDash and Robinhood to its lineup.

Despite jumping on news of its entry into the S&P 500, Veeva's stock has been under pressure this year due to a general selloff in the software sector - it's down 30% since the start of 2026. Only 18 companies in the current S&P 500 have performed worse, MarketWatch points out.

Veeva builds cloud-based software that helps pharmaceutical and biotech companies manage clinical trials, commercial processes and government regulatory issues. Evercore ISI analyst Kirk Matern believes that companies like Veeva may have a structural advantage as they implement AI. According to Matern, Veeva stands out even from other vertical software providers (turnkey programs built for a specific industry) because it is "integrated into critical workflows in highly regulated markets," MarketWatch writes.

The majority of analysts following Veeva stock remain positive on its prospects: 23 Wall Street analysts recommend "buy" Veeva securities, one recommends "sell", and eight recommend "hold" (Hold). The average target price of $266.5 suggests a potential upside of 58% from the April 30 close.

Veeva was founded in the United States in 2007 by Peter Gassner and Matt Wallach. Gassner has been CEO of the company since its inception. In 2013, the company held an IPO on the New York Stock Exchange.

In March, Veeva reported a quarterly profit of $244 million on revenue of about $836 million (up almost 16% year-on-year). CNBC names Amazon, Microsoft, Oracle, Salesforce and Iqvia among the company's main competitors.

This article was AI-translated and verified by a human editor