SpaceX (SPCX) is set to officially join Wall Street’s tech-heavy Nasdaq 100 index on July 7 after raising $75 billion in the largest IPO ever in mid-June.
The stock immediately rose to as high as $225 in the days following the June 12 IPO, only to deflate to $162 last week. Now the big question is what happens after it is included in the Nasdaq index.
The answer is not necessarily bullish when viewed through the lens of history.
Past data suggests that index inclusion, often viewed as a positive milestone, is not a reliable bullish signal, especially after a stock has already experienced a significant rise.
This is because investors’ optimism has in many cases already been elevated and peaked, passive fund purchases have largely been foreseen, and expectations have been priced in.
The two most notable recent additions to the Nasdaq 100 highlight this pattern.
Palantir ( PLTR ), the software giant, joined the index on Dec. 23, 2024, but the stock peaked around the time of its inclusion and fell about 25% in the weeks that followed.
