Three Stocks Are Joining the S&P 500. Will They Actually Improve VOO’s Returns?

Three Stocks Are Joining the S&P 500. Will They Actually Improve VOO’s Returns?

Omor Ibne Ehsan

Wed, September 16, 2026 at 6:55 PM GMT+3 4 min read

Quick Read

• VOO adds BE after its product revenue surged 215% on AI power demand, but new S&P entrants start below 0.1% of the index, barely moving returns.

• TTD exits as revenue growth cratered from 19% to 3%, while TAP leaves trading at just 7x forward earnings with a 4.9% dividend yield.

• VOO's 38% concentration in ten stocks means megacap earnings growth decides where the fund heads next, not any index swap.

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Before trading opens on September 21, 2026, the Vanguard S&P 500 ETF (NYSEARCA:VOO) will rebuild a sliver of its index exposure, according to S&P Dow Jones Indices. S&P Dow Jones Indices announced on September 4, 2026, that three companies are joining the benchmark: Bloom Energy (NYSE:BE) and Illumina (NASDAQ:ILMN). Making room, three names leave: Molson Coors (NYSE:TAP), The Trade Desk (NASDAQ:TTD), and Builders FirstSource (NYSE:BLDR).

For a VOO holder, the swap changes the story of your fund far more than its returns, because VOO uses full replication of a float-adjusted, cap-weighted benchmark, and none of the six names come close to the megacaps that drive performance.

What the Swap Actually Changes

You are trading a struggling brewer, an ad-tech platform in growth decline, and a homebuilder in a housing downcycle for a fuel-cell company riding AI power demand, a sequencing leader, and a water-treatment business.

Bloom Energy arrives on a tear. Product revenue jumped 215% last quarter as hyperscalers bought onsite fuel-cell capacity, and CEO KR Sridhar told investors, "Bloom is now a standard for AI onsite power." Management raised full-year revenue guidance to $3.9 billion to $4.2 billion.

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Illumina brings clinical sequencing back into the index after a bruising few years, with revenue up 9% in the second quarter and raised EPS guidance of $5.30 to $5.40. Service and other revenue climbed as NovaSeq X adoption deepened, and management pointed to building momentum through the first half of 2026 despite ongoing China and tariff headwinds.

Why the Weights Barely Move the Needle

Vanguard's factsheet, dated June 30, 2026, showed 38% of VOO in its ten largest holdings, including 8% in NVIDIA (NASDAQ:NVDA) alone. S&P 500 entrants typically begin well under a tenth of a percent of the index. A 0.1% starting position that doubles would contribute roughly 0.1 percentage point to total return if everything else were unchanged, before trading and tracking costs.

Membership changes rarely register in a broad-market index fund's annual return. The megacap tilt at the top does the heavy lifting. VOO's 0.03% expense ratio and cap-weighted mechanics matter more than any single admission.

Growth Coming In, Cyclicals Going Out

The composition change shifts the index's flavor at the margin. Bloom carries a beta of 3.81 and a forward P/E of 57x, while Illumina trades at a forward P/E of 34x.

The departures are the opposite. Molson Coors trades at a forward P/E of 7x with a 4.9% dividend yield, and Builders FirstSource trades at a forward P/E of 14x. You are paying up for AI and healthcare growth and giving up cheap cyclical and defensive names near cycle lows.

The Bull and Bear Case for VOO

The bull case for VOO is unchanged by this rebalance. You hold the broad U.S. market at fractional cost, and the S&P committee automatically refreshes the roster toward businesses meeting scale, profitability, and liquidity screens. VOO returned 16% over the past year and 317% over ten years.

The bear case is concentration risk that no rebalance can fix. With Vanguard's factsheet showing 38% in ten names and 8% in a single AI chipmaker, VOO's next drawdown will likely be dictated by megacap tech multiples, although Bloom's 3.81 beta will amplify moves in its small slice.

What decides VOO's next year is whether the index top keeps delivering the earnings growth its current multiples require.

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