SpaceX stock falls 5.7% on Nasdaq-100 debut despite Wall Street buy ratings

Spacex shares slid nearly 6% on its first day in the Nasdaq-100 as investors took profits, even as Wall Street banks issued bullish ratings on the company's long-term potential. The index entry, effective July 7, came less than a month after its record IPO.

Nasdaq-100 inclusion

SpaceX joined the Nasdaq-100 after a rule change that allowed large companies to enter just 15 days after listing. The index, tracked by funds managing about $800 billion, will now include SpaceX, forcing passive funds to buy shares. However, the company's weight in the index is less than 1% because less than 5% of its shares are publicly traded. Source: portafolioco JP Morgan estimates index-linked funds will purchase over $4 billion of SpaceX stock. Source: infobae

Limited market impact

Despite the forced buying, SpaceX shares fell 5.7% to around $151, erasing gains from its IPO price of $150. Analysts said the inclusion had already been priced in, and some investors used the event to sell. Source: larepublicaco The drop trimmed Elon Musk's fortune by $58.2 billion, according to Forbes, as Tesla also fell over 4%. Source: infobae

Wall Street optimism

At least six banks began coverage with "buy" ratings. Raymond James set the highest price target at $800, while Morgan Stanley targeted $300 and Arete Research $401. Goldman Sachs and JP Morgan set more conservative targets of $205 and $225, respectively. Source: listindiario The optimism hinges on SpaceX's dominance in space transport, Starlink, and potential AI-driven demand. However, the stock's future will depend on earnings and the expiration of lock-up periods later this year. Source: portafolioco