Broad-market index funds in U.S. retirement accounts are poised to increase their holdings in SpaceX at the next rebalancing. That comes despite a 31% decline in July 2026 and insiders recently gaining permission to sell shares, according to a Morningstar report.
When lockup restrictions began lifting on August 6, 2026, 911.5 million SpaceX shares became eligible for sale for the first time.
That wave mechanically expands the company’s float-adjusted market capitalization, the metric major indexes use to size positions.
The next scheduled rebalance is the Nasdaq-100’s September 2026 quarterly rebalance, which TD Securities projects could lift SpaceX’s weight in that index from about 1% to above 3.5%.
FTSE Russell’s next scheduled reconstitution is on December 11, 2026.
How unlocking insider shares forces index funds to buy more SpaceX
SpaceX was added to the Russell 1000 and Nasdaq-100 within weeks of its June initial public offering (IPO), and the December rebalance will decide how much more of it those index funds hold.
The eligible shares that were unlocked represent 143% of the 639 million shares available to public investors shortly after SpaceX’s IPO, Morningstar reported.
If those shares enter the public float, SpaceX’s float-adjusted market cap would increase 2.43 times with no change in the stock price.
That expansion would push SpaceX into the Russell 1000’s top 100 holdings at roughly 0.20% of the index, alongside CVS Health and Pfizer.
For context, SpaceX’s $1.4 trillion market cap carried the same 0.08% Russell 1000 weight as Delta Air Lines’ $57 billion valuation, analyzed by Morningstar. The disparity reflected the relatively small number of SpaceX shares available for public trading.
“Index funds will be forced to buy more SpaceX stock just as insiders are selling,” the firm warned in the report. Buying is triggered by float expansion, which is why passive demand can rise in the same quarter the stock falls by 31%.
How SpaceX entered retirement accounts in weeks
SpaceX debuted on Nasdaq on June 12, 2026, raising approximately $75 billion at $135 per share in the largest IPO in Wall Street history. Underwriters held an over-allotment option that could have pushed the total toward $86 billion, but it was not fully exercised.
Within 15 trading days, Nasdaq’s new fast-entry rule placed the stock inside the Nasdaq-100, triggering about $4.3 billion in forced buying from funds tracking the index alone, JPMorgan estimated.
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Owen Lamont, senior vice president at Acadian Asset Management, criticized the compressed timeline before SpaceX listed. “Bad idea. That’s too short for price discovery to occur,” he wrote in a March 2026 analysis.
FTSE Russell added SpaceX to the Russell 1000 during its June 26, 2026, reconstitution. At July 31, 2026, prices, the float expansion could lift SpaceX’s Russell 1000 weight to roughly 0.70% after the rebalance.
SpaceX entered major stock indexes within weeks, forcing retirement funds to buy billions despite critics warning the timeline was too rushed.Bloomberg / Getty Images
Analysts see SpaceX trading well above fair value
Morningstar analyst Nicolas Owens initiated SpaceX coverage with a fair value estimate of $63 before the June 12 IPO, lowering it to $62 on June 16, placing the stock among the most overvalued names in the firm’s coverage.
After the second-quarter results on August 5, 2026, Owens reaffirmed the figure and noted that shares were trading at roughly twice his valuation, Morningstar’s earnings analysis indicated.
Second-quarter revenue hit $7.8 billion, up 92% year-over-year, but SpaceX still posted a $541 million net loss, according to the SpaceX Q2 earnings release.
It lost nearly $5 billion in 2025 on $18.7 billion in revenue, largely from a $6.35 billion operating loss in the AI segment that Starlink’s $4.4 billion in operating profit could not offset, Morningstar S-1 analysis showed.
George Noble, who previously ran the Fidelity Overseas Fund and worked under Peter Lynch, told Business Insider that SpaceX and Tesla represented “two of the best shorts in the market” and pegged fair value for both at roughly $30 per share, implying 79% downside for SpaceX at recent trading levels.
He flagged the way passive index funds channeled retirement savings into the stock as a core structural concern.
The S&P 500 is not joining the SpaceX buying spree
One major benchmark has stayed on the sidelines. The S&P 500 rejected a fast-track inclusion proposal in June 2026, keeping its one-year seasoning period and profitability requirements in place.
Art Hogan, Chief Market Strategist at B. Riley Wealth, told CNBC that S&P’s refusal to bend its rules for SpaceX reinforced the index’s institutional credibility.
It speaks highly of the credibility of S&P Dow Jones Indices to be rules-based and make sure there’s profitability before entrance to the index. Making exceptions because companies are so large and have been private so long yet are still not profitable, didn’t make a great deal of sense
SpaceX cannot enter that index before June 2027, and ongoing losses could push the date further.
Bloomberg Intelligence data puts direct passive tracking of the S&P 500 at roughly $7.5 trillion in assets. Another $3.4 trillion in actively managed funds use the index as their benchmark, without current SpaceX exposure.
What growing SpaceX exposure means for retirement accounts
Millions of Americans who never bought a share of SpaceX already own it through their 401(k) or IRA index funds.
The Nasdaq-100, Russell 1000, MSCI USA, and Morningstar US Total Market all hold SpaceX and are expected to increase their weightings at December’s rebalance.
At a 0.14% weighting, Vanguard’s $2.3 trillion Total Stock Market ETF alone held over $3.2 billion in SpaceX as of late June.
When 911 million newly unlocked insider shares enter the float calculation, those positions grow automatically, none of it flagged on a quarterly statement.
That means retirement portfolios are mechanically adding to a stock Morningstar values at roughly half its trading price, with ongoing losses and further lockup tranches ahead.
The S&P 500 remains the one major benchmark that excludes SpaceX, and actively managed funds retain discretion over whether to hold it.
Related: Top analyst sees trouble looming for SpaceX stock