SpaceX (SPCX) is set to officially join Wall Street’s Nasdaq 100 index on July 7 after raising $75 billion in the largest IPO of all time in mid-June.
The stock immediately shot up to $225 in the days following the June 12 IPO, only to fall back to $162 last week. Now the big question is what will happen once it is included in the Nasdaq index.
The answer is not necessarily optimistic when viewed through the prism of history.
Past data suggests that inclusion in an index, often seen as a positive step, is not a reliable bullish signal, particularly after a stock has already seen a significant rally.
Indeed, in many cases, investor optimism is already high and reaching its maximum, purchases of passive funds have been largely anticipated and expectations are taken into account.
The two most notable recent additions to the Nasdaq 100 highlight this trend.
Palantir (PLTR), the software giant, joined the index on December 23, 2024, but the stock peaked around the time of its inclusion and fell about 25% in the weeks that followed.
