TL;DR

• SpaceX was added to the Nasdaq 100 on July 7, with a decline on the first day, as expected passive buying did not form short-term support.
• Market divergence focuses on how much of the value of Starship, Starlink, and AI infrastructure is already priced into the current valuation.
• Related instruments: SPCX, QQQ/QQQM, Goldman Sachs, Morgan Stanley, JPMorgan, AI infrastructure theme.

SpaceX was officially included in the Nasdaq 100 index before the market opened on July 7, but its stock price dropped more than 5% on the first day, closing at around $149.

This is contrary to the intuition of many investors. Nasdaq announced that the global asset size of products tracking the Nasdaq 100 exceeds $800 billion. Based on this, the market estimated that the inclusion of SpaceX could bring about $4 billion to $6 billion in passive buying.

Coupled with the focused coverage on Wall Street after the quiet period ended, this initially seemed like a typical liquidity positive. However, the price reaction on the first day reminded investors that index inclusion does not equate to stock price insurance. The market is trading whether this passive demand can suppress the preemptive sell orders, the pressure to realize valuations, and the potential unlock supply after the first financial report.

Passive buying provides liquidity, not directional guarantee

The mechanism of index inclusion is not complex. After a stock enters the Nasdaq 100, funds tracking the index need to buy in proportion to reduce deviations from the index. Such funds typically do not judge whether the stock is overvalued, hence they are called passive buying.

SpaceX attracted attention this time due to the rapid pace. Company announcements show that SpaceX completed its IPO pricing on June 11, with an issuance price of $135, and trading began on June 12 under the ticker SPCX. Less than a month later, Nasdaq announced it would become a component of the Nasdaq 100 before the market opened on July 7.

This created a readily spread trading story: a super IPO, quick index inclusion, index funds must buy. Estimates cited by market reports, including Barron’s, suggest that passive demand could reach around $4 billion to $6 billion. This figure is not the official stance of Nasdaq or SpaceX, but it is sufficient to anchor short-term trading.

Passive buying represents real demand, but it is not unilateral demand. The expectation of index funds needing to buy is often preemptively traded by other investors. By the time the inclusion takes effect, early entrants may choose to sell their shares to these must-buy funds.

Therefore, a decline on the inclusion day should not simply be understood as "passive funds did not buy." A more accurate statement is that passive funds provide liquidity, while active funds determine the price direction on that day.

Supply pressure is traded on the inclusion day

The drop on SpaceX's inclusion day can be directly explained by active selling after the positive news landed. The IPO issuance price was $135, and soon after listing, the price rose above the issuance price, with the market having already absorbed some expectations of index buying before inclusion.

The macro environment also did not support it. On July 7, the technology and chip sectors were under pressure, and overvalued growth stocks were more susceptible to a decline in risk appetite. For short-term funds, when the overall market sentiment weakens, the certain buying provided by index inclusion becomes a realization window.

A more sensitive variable is the next round of supply. Public documents and secondary interpretations show that after the first financial report, about 20% of the early-released qualified shares may be released from restrictions. If share price conditions are met, an additional 10% may also be released. This does not mean that relevant holders will necessarily sell immediately, but it will change the market's expectations for future supply and demand.

Short-term buying is one-time, while unlock expectations will influence the willingness to hold positions in the following weeks. Investors are not only asking "how much do index funds need to buy," but also "will early shareholders and internal holders sell off to take advantage of improved liquidity."

The drop on July 7 does not mean the market negates SpaceX's long-term story. It is more like a shift in trading logic: from trading inclusion expectations to trading supply risks before the unlock.

From $300 to $800, divergence lies in long-term AI options

If one only looks at the number of ratings, SpaceX still appears to be favored by Wall Street. According to media compilations, after the quiet period ended, the majority of analysts offered positive ratings. However, investors should pay more attention to the range of target prices and what different models incorporate into their valuations.

According to brokerage reports, the Morgan Stanley Adam Jonas team gives a target price of $300 and values the space launch business separately at about $8 per share. This differentiation is informative: in this model, the visible launch business today is not the main driver of valuation, and greater upside potential comes from the commercialization vision after Starship reduces orbital entry costs.

Brian Gesuale from Raymond James is even more aggressive, with media reports placing his target price at $800, viewing AI-related revenue around 2035 as an important assumption. The core of this judgment is not whether rockets can fly, but whether SpaceX can transform from a launch company and satellite internet provider into an orbital AI infrastructure platform.

The meaning of long-term valuation options is that today's stock price already includes bets on future new business. It may be very valuable, but the path to realization is longer and relies on several key factors: whether Starship can be reliably reused, whether launch costs can continue to decrease, whether Starlink can expand, and whether AI computing or data businesses can form contracts and profits.

Conservative estimates will emphasize another aspect. The current valuation at about $2 trillion has already factored in significant future growth. The split from $300 to $800 is essentially the market debating how much premium should be paid today for stories beyond 2030.

This also explains why positive ratings do not automatically become price support. Ratings can reinforce long-term narratives, but short-term trading still faces a stark reality: when the most optimistic models have already incorporated AI infrastructure revenue into future assumptions, how much safety margin is left in current prices.

The first financial report will test the valuation anchor

It is challenging to fully differentiate which type of funds caused the selling pressure on the first inclusion day. More useful for investors is the observation point of whether the first financial report in August and the unlock window can provide a new valuation anchor for the market.

If the financial report can deliver clear revenue growth, Starlink expansion, Starship progress, or AI business clues, the market will be more willing to push forward the long-term assumptions included in the $300 or even higher target price. At that time, the supply brought by the unlock may be absorbed by new buying, and the liquidity following index inclusion may actually become an advantage.