Sandisk Joins S&P 500 Following Western Digital Spinoff, Replacing Interpublic

Shares of flash storage vendor SanDisk Corp. popped 4% in premarket trading on Tuesday after the company was added to S&P 500.

Sandisk’s addition to the benchmark comes nine months after the company was spun out of Western Digital. Sandisk will replace marketing company Interpublic, which is being acquired by Omnicom, S&P Global said in a statement.

It’s the latest tech company to join the S&P 500, which gets an increasing amount of its value from internet, software and semiconductor businesses. AppLovin, Datadog, DoorDash and Robinhood became members of the index earlier this year.

Stocks tend to rally when they’re added to the benchmark as fund managers who track the S&P 500 need to buy shares to reflect the changes.

Western Digital bought Sandisk in 2016 for $15.6 billion. In February, Western Digital spun out its flash business as Sandisk, which now has a market cap of about $33 billion.

Sandisk sells fast storage drives for gaming PCs, digital cameras and security cameras, and is also trying to land deals with large-scale data center builders. Revenue in the latest quarter rose 23% to $2.31 billion. The company reported a 31% increase in exabytes sold.

Omnicom announced plans to acquire Interpublic in December, and on Monday said the deal received antitrust approval from the European Commission.