SpaceX shares slide as it joins the tech-heavy Nasdaq-100

SpaceX achieved one of the fastest entries into the Nasdaq-100 index, joining the benchmark on Tuesday following its stock market debut on June 12. The rapid inclusion became possible after Nasdaq revised its rules for newly listed companies, allowing mega-cap firms to enter after just 15 trading days rather than the traditional waiting period. The Texas-based company had specifically lobbied for this waiver, while the S&P 500's operator did not adopt similar changes.

The addition to the tech-heavy index was expected to generate substantial demand from passive investment vehicles. Index funds and exchange-traded funds tracking the Nasdaq-100 would need to purchase SpaceX shares to align with the benchmark's updated composition. More than a dozen brokerages, including IPO underwriters Morgan Stanley, Goldman Sachs, and JP Morgan, initiated coverage with predominantly bullish ratings, marking Wall Street's first attempt to value the company using conventional financial metrics rather than relying solely on investor confidence in Elon Musk's long-term vision.

However, SpaceX shares declined 5.4 percent on their index inclusion day, reflecting a broader pullback in high-momentum technology stocks. Concerns about the sustainability of the artificial intelligence boom weighed on investor sentiment. According to Mark Hackett, chief market strategist for Nationwide, nervousness about inflated expectations persisted, with sentiment likely to remain cautious until companies release earnings reports.

SpaceX carries a 1.34 percent weighting in the Nasdaq-100 index, substantially lower than major heavyweights such as Nvidia and Apple, as Nasdaq adjusts weights based on free-float market capitalization. Analyst projections for the company's growth center on Starship, its fully reusable next-generation rocket. Wall Street forecasts vary widely on annual Starship launch volumes by 2031, ranging from JP Morgan's projection of approximately 5,000 launches to UBS's estimate of more than 1,500, depending on the degree of reusability SpaceX achieves. Raymond James set the highest price target at $800 per share.