The Spacex Ipo Is Days Away: Could The Stock Join The S&a…
The rules standing in SpaceX’s way
Getting into the S&P 500 takes more than size. S&P Dow Jones Indices, which runs the index, requires a candidate to be a U.S. company with a market value of at least $22.7 billion — a bar SpaceX would clear about 78 times over.
The tougher tests, however, come next.
For starters, at least 10% of a company’s s must be available for public trading, and a newly listed stock must trade for at least 12 months before it can be considered. SpaceX’s IPO covers only about 4% of its roughly 13.1 billion s outstanding.
Then there’s the most demanding test: profitability. A candidate must report positive earnings under generally accepted accounting principles (GAAP) in its most recent quarter, and its past four quarters combined must be profitable, too. SpaceX isn’t close. Its prospectus shows a net loss of $4.9 billion in 2025, ed by a $4.3 billion net loss in the first quarter of 2026 alone.
That’s not because the whole business loses money. SpaceX’s connectivity segment, driven by the Starlink satellite internet service, grew revenue about 50% to $11.4 billion in 2025 and produced an operating profit of about $4.4 billion. But the artificial intelligence (AI) segment, built around the recently acquired xAI, lost about $6.4 billion at the operating level last year. And the company poured $12.7 billion into AI data centers and computing power last year.
Investors hoping the index might bend its rules recently got their answer.
In April, S&P Dow Jones Indices floated changes that would have shortened the waiting period and waived the profitability and float tests for megacap companies. But on June 4, the index provider said no changes would be made, noting the decision “preserves core index principles by maintaining consistent application of these key requirements.”
Interestingly, the Nasdaq-100 is a different story. Under rules that took effect in May, a newly listed company ranked among the index’s top 40 constituents by market value can be added after just 15 trading days. Funds tracking that benchmark, therefore, could become buyers of SpaceX within weeks.
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NASDAQ: TSLA
Tesla
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What Tesla’s long wait suggests
For a sense of how this could play out, look at another company Elon Musk leads.
Tesla went public in June 2010 and didn’t join the index until December 2020. Why did it take so long? The electric vehicle maker couldn’t pass the earnings test until it posted a fourth consecutive quarter of GAAP profits in mid-2020.
Even then, the index committee passed Tesla over at its September 2020 rebalancing before announcing the addition in November. By the time the stock joined on Dec. 21, 2020, s had climbed more than 50% from the announcement, and index funds needed to buy about $85 billion of Tesla stock — the largest rebalancing in the index’s history.
Could SpaceX a similar path?
The 12-month clock starts Friday, so the company couldn’t even be considered until mid-2027. And the financial test may take longer. For SpaceX’s trailing four quarters to add up to a profit, quarterly earnings would need to outweigh losses the $4.3 billion reported in Q1. Starlink’s momentum could eventually get it there — the service counted 10.3 million subscribers at the end of March after its subscriber base doubled in 2025. But management’s heavy spending on AI suggests near-term profits aren’t the priority.
Of course, the index isn’t everything.
Tesla delivered huge returns long before joining the S&P 500 — s soared about 400% in 2020 before the inclusion announcement — and SpaceX could similarly reward holders on its own merits.
Still, I think the index question highlights what a SpaceX investment is today: a bet on a company choosing growth over profits. A wave of forced index buying could one day be a powerful catalyst for the stock, but it’s just unly to come soon. After all, the S&P 500 isn’t making a megacap exception here — even for the largest IPO in history.
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About the Author
Daniel Sparks is a contributing Motley Fool stock market analyst covering technology, industrials, financials, and consumer goods. Daniel is the owner and chief investment officer of Sparks Capital Management. He holds a master’s degree in business administration from Colorado State University. The Globe and Mail profiled him and his investing philosophy in an article titled, “This stock picker is outperforming nearly everybody else. Here’s how he is doing it.”
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