SpaceX (SPCX) will officially join Wall Street’s tech-heavy Nasdaq 100 index on July 7, after raising $75 billion in the largest initial public offering of all time in mid-June.
Shares immediately rose as high as $225 in the days following the June 12 initial public offering, only to deflate to $162 last week. Now the big question is what will happen after its inclusion in the Nasdaq index.
The answer is not necessarily optimistic when viewed through the lens of history.
The data above suggests that inclusion in the index, often seen as a positive milestone, is not a reliable bullish signal, particularly after a stock has already seen a significant rally.
This is because, in many cases, investor optimism is already high and has peaked, passive purchasing of funds has been largely anticipated, and expectations are discounted.
The two most notable recent additions to the Nasdaq 100 highlight this pattern.
Palantir (PLTR), the software giant, joined the index on December 23, 2024, but the stock peaked at the time of its inclusion and fell approximately 25% in the following weeks.
