Major brokerages issued bullish ratings and initiated coverage of SpaceX after the company was added to the Nasdaq-100 index [1, 2].
This move signals a significant shift in the accessibility of the company's equity. Inclusion in the index is expected to trigger large passive inflows as index-tracking funds are required to purchase shares to mirror the Nasdaq-100 composition [1, 3].
Financial institutions including Morgan Stanley, Goldman Sachs, and Wells Fargo have lined up bullish calls as the company enters the U.S. equity market [1, 2]. Analysts said the company has growth prospects and a valuation that has exceeded $2 trillion [1].
Market projections for the stock price vary among the initiating firms. Arete Research set a high target price of US$401 [4], while New Street Research provided a lower target price of US$165 [4].
Industry experts said the passive buying resulting from the index addition is expected to reach billions of dollars [1]. This surge in demand reflects broad confidence in the company's long-term trajectory and its dominant position in the aerospace sector [1, 3].
“Passive buying expected to be in the billions”
The transition of SpaceX from a private entity to a component of the Nasdaq-100 fundamentally alters its capital structure. By triggering mandatory buying from passive index funds, the company secures a massive influx of liquidity that can be used to scale its ambitious launch and satellite projects. Furthermore, the wide range in analyst price targets suggests that while the growth trajectory is undisputed, the exact market premium for its unique technology remains a point of contention on Wall Street.
