Okta joins the S&P 500, filling Kenvue's seat

Overview

Updated 1 hour ago

Okta will join the S&P 500 before the market opens on Nov. 4, replacing Kenvue, the consumer health company Kimberly-Clark is buying for roughly $40 billion. The announcement came after Friday's close, and Okta shares rose about 2.3% in extended trading to $213.02, recovering part of a 6.1% drop during the regular session.

The seat opened because of an acquisition, not a verdict on Okta's business. Because the S&P 500 must stay full, Okta's promotion pulled Glaukos up from the small-cap index into the mid-cap index, and pulled McGrath RentCorp into the small-cap index behind it.

Why it matters

Every fund tracking the S&P 500 must now buy Okta, giving a $35.9 billion company the same forced demand as the market's largest firms.

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Key Indicators

$35.9B

Okta market value

Market capitalization at the Oct. 30 announcement, before the after-hours move.

$208.24

Friday closing price

Okta's regular-session close on Oct. 30, down 6.1% for the day.

+2.3%

After-hours move

Gain in extended trading after the index announcement, to $213.02.

~57x

Price-to-earnings multiple

Roughly 57 times the midpoint of Okta's fiscal-2027 non-GAAP earnings guidance at the $222 level, against low-double-digit revenue growth.

20,000+

Okta customers

Customer count as of Jan. 31, 2026, including 5,100 paying more than $100,000 a year.

~157%

Year-to-date share gain

Okta's rise in 2026 through late October, more than triple its 52-week low of about $63.

Voices

Curated perspectives — historical figures and your fellow readers.

People Involved

Todd McKinnon

Co-founder and chief executive, Okta

Leads Okta as it enters the S&P 500

Organizations Involved

Okta

Public company

Joining the S&P 500 on Nov. 4, 2026

An identity-security company whose software decides who can log into which applications.

S&P Dow Jones Indices

Index provider

Announced the constituent changes

The S&P Global unit that maintains the S&P 500, S&P MidCap 400 and S&P SmallCap 600.

Kenvue Inc.

Public company

Leaving the S&P 500 upon its acquisition by Kimberly-Clark

The consumer health company behind Tylenol, Listerine and Band-Aid.

Kimberly-Clark Corporation

Public company

Acquiring Kenvue, pending final closing conditions

The maker of Huggies, Kleenex and Cottonelle, and an S&P 500 constituent itself.

Glaukos Corp.

Public company

Moving from the S&P SmallCap 600 to the S&P MidCap 400

An eye-care device company that makes products for glaucoma and corneal disorders.

McGrath RentCorp

Public company

Joining the S&P SmallCap 600

An equipment rental company that supplies modular buildings and test equipment.

Loar Holdings Inc.

Public company

Joining the S&P SmallCap 600

An aerospace and defense parts supplier entering the small-cap index.

Timeline

4 events Latest: 2 days ago

Tap a bar to jump to that date

October 2026
Okta named to the S&P 500
Latest Announcement

S&P Dow Jones Indices says Okta will replace Kenvue before the Nov. 4 open, moving up from the S&P MidCap 400.
2 days ago • after market close
The vacancy comes from an acquisition, not a downgrade
Context

S&P DJI attributes Kenvue's removal to Kimberly-Clark's pending acquisition, described as expected to close soon. LiveRamp's exit follows the same pattern, with Publicis Groupe buying it.
2 days ago
Promotions cascade down two smaller indexes
Announcement

Glaukos moves up to the S&P MidCap 400, McGrath RentCorp enters the S&P SmallCap 600, and Loar Holdings replaces LiveRamp. All changes take effect the same day.
2 days ago
Okta falls 6.1%, then gains 2.3% after hours
Market reaction

Okta closed at $208.24 during a broad technology selloff, then traded as high as $214.99 once the index news crossed.
2 days ago • evening

Scenarios

Okta keeps its S&P 500 seat through 2027

Likely Resolves by Nov 1, 2027

Discussed by: S&P Dow Jones Indices, whose announcement frames the change as filling a vacancy created by an acquisition

Index removals usually follow an acquisition, a bankruptcy or a market value that no longer fits the large-cap index. None of those applies to Okta today, and the company's $35.9 billion value sits comfortably inside the S&P 500 range. The seat stays Okta's unless someone buys the company or its value falls far enough to trigger a removal.

Index buying fades and Okta trails the S&P 500 over the next year

Possible Resolves by Nov 4, 2027

Discussed by: The Ainvest analysis of the inclusion, which notes that a liquidity bid can lift a stock for a quarter, sometimes less

Funds tracking the index must own Okta by the Nov. 4 open, but that buying happens once. At roughly 57 times the midpoint of earnings guidance while revenue grows about 10% to 11%, the shares already assume faster growth than Okta has guided to. If the growth does not arrive, the forced demand does not protect the price.

Okta's revenue growth climbs above 15%

Unlikely Resolves by End of 2027

Discussed by: The Ainvest analysis, which points to identity controls for autonomous AI agents as the case for a higher multiple

Okta has been selling an Agent Gateway that governs what AI agents are allowed to do inside corporate systems. If companies buy it at scale, each new agent generates more identity decisions to gate, and revenue growth could move above the low-double-digit pace Okta has guided to.

Historical Context

2 moments from history that rhyme with this story — and how they unfolded.

December 2020

Tesla joins the S&P 500 (December 2020)

Tesla was added to the S&P 500 on Dec. 21, 2020, after a steep run-up in its shares. Because the index is weighted by market value, funds tracking it had to buy the stock at a price that run-up had already set, and the rebalance traded enormous volume.

Then

The addition produced one of the largest single rebalancing events in index history, with tracking funds buying at the elevated price.

Now

The episode became the standard example of what index inclusion does and does not do: it adds demand, not earnings.

Why this matters now

Okta's inclusion is the same mechanism at a smaller scale. Funds buy because the rules require it, and the price they pay reflects expectations set before the announcement.

September 2024

Palantir joins the S&P 500 (September 2024)

S&P Dow Jones Indices announced in early September 2024 that Palantir would join the S&P 500, effective Sept. 23. The software company had already risen sharply that year, and its shares moved again on the news before tracking funds bought in.

Then

The stock rose on the announcement and drew a wave of passive buying at the effective date.

Now

Palantir's inclusion widened institutional ownership of a high-multiple software company and made its valuation a topic of sustained debate.

Why this matters now

Like Okta, Palantir entered the large-cap index as a richly valued software company. The comparison shows that inclusion settles the question of who must own a stock, not whether the price is right.