SpaceX set to join Nasdaq 100, fueling expected surge in passive fund flows
June 26 (Reuters) – SpaceX is set to join the Nasdaq 100 index on July 7, exchange operator Nasdaq confirmed on Friday, clearing the way for a flood of passive investments into Elon Musk’s rocket and artificial intelligence company.
Index inclusion typically lifts a stock’s price because exchange-traded funds and mutual funds that track the benchmark are forced to buy shares of the newly added company. For SpaceX, the addition could translate into billions of dollars in automatic buying.
To make the U.S. capital markets more attractive for newly public companies, Nasdaq — along with index providers FTSE Russell and MSCI — has relaxed its entry criteria, including profitability requirements, the minimum number of days since a company went public, and the float of shares available for trading.
SpaceX made its Nasdaq debut on June 12. Over the past three years, its financial performance has been volatile, swinging between steep losses and modest profits. Last year alone, the company reported a net loss of $4.9 billion.
Large-language-model makers OpenAI and Anthropic are also expected to file for initial public offerings this year or next, with valuations potentially exceeding $1 trillion, according to people familiar with their plans.
Investors looking for broad exposure to the tech sector often buy funds that track the Nasdaq 100, such as Invesco’s QQQ and QQQM. J.P. Morgan estimates that SpaceX’s inclusion could generate roughly $4.3 billion in passive inflows.
“Clearly, there’s a lot of demand — that’s why they fast-tracked the integration into the index,” said Michael Field, chief equity market strategist at Morningstar. “A lot of people will be happy with it. Some fund managers less so, the skeptics among them, us included. We think the stock is overvalued.”
In contrast, S&P Global said this month that it would not change requirements for SpaceX to join its major indices, including the benchmark S&P 500, and would wait at least 12 months before even considering the company.
(Reporting by Johann M Cherian in Bengaluru; Editing by Shinjini Ganguli and Will Dunham)