SpaceX will be added to the Nasdaq 100 index as early as July. What does this mean for investors?

SpaceX will be included in one of the major U.S. stock market indices—the Nasdaq 100—as of July 7, Nasdaq confirmed after the market closed on June 26.

This is one of the fastest additions to the Nasdaq 100 in history, according to CNBC. The space company went public less than a month ago, on June 12. To make itself more attractive to companies seeking to go public, the Nasdaq—along with other index providers such as FTSE Russell and MSCI—has relaxed its requirements for candidates. The changes affected profitability criteria, the minimum time since going public, and the number of shares available for trading.

Inclusion in an index is generally good news for a stock’s price. This means that exchange-traded funds (ETFs), which aim to replicate the index’s composition, will now have to buy shares of the company that has recently been added to the index. According to J.P. Morgan, SpaceX’s inclusion in the Nasdaq 100 index could attract $4.3 billion in passive investments, Reuters reports.

“It’s clear that demand is high—which is precisely why the index inclusion process was expedited,” said Michael Field, chief equity strategist at Morningstar. “Many will be pleased by this. However, some fund managers—particularly skeptics, a group to which we belong—will view the news less positively. We believe the stock is overvalued.”

S&P Global, for its part, stated in June that it has no plans to change the rules for SpaceX’s accelerated inclusion in its key indices, including the benchmark S&P 500. The provider is prepared to consider this matter no sooner than 12 months from now.

This article was AI-translated and verified by a human editor