SpaceX Enters Nasdaq-100 as Index Funds Prepare to Buy

Nasdaq confirmed last month that SpaceX would join the Nasdaq-100 today under new fast-track rules that let very large IPOs enter major benchmarks sooner. J.P. Morgan estimates index-tracking funds will channel about $4.3 billion of passive inflows into the stock as they rebalance to match the index.

Funds that mirror the Nasdaq-100 are required to hold the same names and weightings as the benchmark. Products that track the index will buy SpaceX shares to match those weightings, producing mechanical demand tied to index reconstitution rather than a fresh assessment of the company’s business.

SpaceX began trading on June 12 and has shown wide price swings since its debut. The stock rose as much as 67% after the IPO and then fell sharply in subsequent sessions. Market participants point to a limited public float and high retail interest as factors that can magnify the price impact of large, concentrated purchases.

Several brokerages have started coverage since the IPO. Morgan Stanley opened with an Overweight rating and a $300 price target, describing potential growth across launch services, Starlink broadband and AI-related infrastructure. Wedbush initiated with an Outperform rating and a $190 target, citing Starlink, Starship and space-based connectivity as growth drivers.

Other market signals point to downside risk. Morningstar views the stock as overvalued and notes that index-driven buying can support a share price only temporarily. Options traders assign about a 40% probability that the stock could trade below $130 by mid-September, according to a Susquehanna analysis. Short interest stands near 196 million shares, roughly 31% of the tradable float, and short sellers have accumulated mark-to-market losses near $760 million since the IPO. Peter Hillerberg, co-founder of Ortex, described the rise in short positions as “extraordinary” and said continued strength could create “potential fuel” for a squeeze.

The Nasdaq-100 inclusion will require passive purchases by index-tracking funds in the near term. Market characteristics that may affect price movement include the stock’s limited public float, strong retail participation, and elevated short interest.