SpaceX draws bullish brokerage coverage as Nasdaq-100 entry boosts stock demand

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SpaceX Nasdaq-100 entry boosts demand

Highlights

SpaceX enters the Nasdaq-100 on June 18 with a 1.34% weight, prompting index funds to buy shares and J.P. Morgan expects $4.3 billion in passive inflows.
Despite index inclusion, SpaceX shares drop 5.4% amid broader tech pullback and concerns over the sustainability of AI-driven momentum until upcoming earnings.
More than a dozen brokerages initiate coverage with mostly bullish ratings, citing Starship as the long-term growth driver, with Raymond James setting an $800 price target versus the $135 IPO price.

Index inclusion reshapes near-term trading dynamics

As reported by Reuters, SpaceX joins the tech-heavy Nasdaq-100 on Tuesday after listing on June 12, making it one of the fastest additions to the benchmark following Nasdaq's revised rules for newly listed companies. Funds and ETFs tied to the index now need to buy the stock to reflect the benchmark's updated composition.

LSEG data shows SpaceX carries a 1.34% weight in the index, well below larger constituents such as Nvidia and Apple because Nasdaq adjusts weightings based on free float, or the number of shares available for public trading. J.P. Morgan estimated last month that the company's addition could attract about $4.3 billion in passive inflows, with more than $587 billion benchmarked to funds tracking the Nasdaq-100, including Invesco's QQQ.

Despite that expected support, SpaceX shares fall 5.4% as investors pull back from high-momentum technology names, including Micron Technology, amid concerns about how long the AI boom can last. Mark Hackett, chief market strategist for Nationwide, says there is nervousness that expectations may be running too high and that caution could persist until earnings results arrive.

Wall Street backs growth story but sees execution risks

More than a dozen brokerages, including IPO underwriters Morgan Stanley, Goldman Sachs and J.P. Morgan, have started coverage with largely positive ratings as Wall Street makes its first broad attempt to value SpaceX using conventional metrics. Goldman analysts say the company is positioned to scale advantages across space, connectivity and AI, and argue each market could become a multi-trillion-dollar opportunity over a period of more than five years.

Analysts broadly view Starship, the company's fully reusable next-generation rocket, as the main driver of long-term growth assumptions. Forecasts point to thousands of Starship launches annually by 2031, including around 5,000 from J.P. Morgan, 4,600 from Wells Fargo, 3,500 from Bernstein and more than 1,500 from UBS, depending on how much reusability the company achieves.

Raymond James set a Street-high price target of $800, arguing SpaceX could emerge as one of the century's defining infrastructure platforms, compared with its IPO price of $135 a share. Still, some firms remain cautious, with MoffettNathanson, KeyBanc and Argus Research holding neutral-equivalent ratings, while CFRA is the only brokerage with a sell rating and a $115 price target.

Investors are also betting SpaceX can expand beyond launch services and satellite communications into hyperscale AI infrastructure through its Grok model, competing with OpenAI's GPT models and Anthropic's Claude. At the same time, expectations for Starlink's continued strength in satellite communications and for Starship's successful development remain central to the company's longer-term valuation.

Our earlier article on tech-led S&P 500 earnings expectations explained why strategists see technology profits driving the next leg higher for U.S. equities, with projections pointing to the index potentially surpassing 8,000 by 2027. We also noted that Micron sits at the center of the AI trade, with analysts arguing AI-related memory demand could extend its earnings cycle and support further upside after a steep run-up in the stock.

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