U.S. retirement accounts holding broad-market index funds are set to significantly increase their SpaceX holdings during the upcoming rebalancing period, according to a Morningstar report. This automated buying will occur despite a 31% decline in July 2026 and recent permission granted to insiders to sell their shares.
When lockup restrictions began lifting on August 6, 2026, approximately 911.5 million SpaceX shares became eligible for public sale for the first time.
This substantial unlock mechanically expands the company’s float-adjusted market capitalization—the metric that major indexes use to determine position sizing.
The next scheduled rebalance for the Nasdaq-100 is set for September 2026, with TD Securities projecting that SpaceX’s weight in that index could rise from approximately 1% to above 3.5%.
FTSE Russell’s next scheduled reconstitution is scheduled for December 11, 2026.
How Unlocked Insider Shares Force Index Funds to Purchase More SpaceX
SpaceX was added to both the Russell 1000 and Nasdaq-100 within weeks of its June initial public offering, and the December rebalance will determine how much additional exposure these index funds must hold.
The newly eligible shares represent 143% of the 639 million shares that were available to public investors shortly after SpaceX’s IPO, according to Morningstar.
If these shares enter the public float, SpaceX’s float-adjusted market capitalization would increase by a factor of 2.43, with no change in the stock price.
This expansion would propel SpaceX into the Russell 1000’s top 100 holdings at approximately 0.20% of the index, positioning it alongside CVS Health and Pfizer.
For context, SpaceX’s $1.4 trillion market capitalization carried the same 0.08% Russell 1000 weight as Delta Air Lines’ $57 billion valuation, according to Morningstar’s analysis. This disparity reflected the relatively limited 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 its report. This buying is triggered by float expansion, which explains why passive demand can rise during the same quarter that the stock falls by 31%.
How SpaceX Entered Retirement Accounts in Weeks
SpaceX debuted on the 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 to nearly $86 billion, though it was not fully exercised.
Within just 15 trading days, Nasdaq’s new fast-entry rule placed the stock in the Nasdaq-100, triggering approximately $4.3 billion in forced buying from funds tracking the index alone, according to JPMorgan estimates.
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 approximately 0.70% following the rebalance.
Analysts See SpaceX Trading Well Above Fair Value
Morningstar analyst Nicolas Owens initiated SpaceX coverage with a fair value estimate of $63 prior to the June 12 IPO, adjusting it to $62 on June 16, placing the stock among the most overvalued names in the firm’s coverage universe.
Following the second-quarter results on August 5, 2026, Owens reaffirmed this figure and noted that shares were trading at approximately twice his valuation, according to Morningstar’s earnings analysis.
Second-quarter revenue reached $7.8 billion, representing a 92% year-over-year increase, but SpaceX still reported a net loss of $541 million, according to the company’s Q2 earnings release.
The company lost nearly $5 billion in 2025 on $18.7 billion in revenue, largely due to a $6.35 billion operating loss in its AI segment that Starlink’s $4.4 billion in operating profit could not offset, according to Morningstar’s S-1 analysis.
George Noble, who previously managed 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 estimated fair value for both at approximately $30 per share, implying 79% downside for SpaceX at current trading levels.
He highlighted the way passive index funds channel retirement savings into the stock as a core structural concern.
The S&P 500 Remains on the Sidelines
One major benchmark has remained uninvolved in the SpaceX buying activity. The S&P 500 rejected a fast-track inclusion proposal in June 2026, maintaining its one-year seasoning period and profitability requirements.
Art Hogan, Chief Market Strategist at B. Riley Wealth, told CNBC that the 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 potentially push that date further out.
Bloomberg Intelligence data indicates that direct passive tracking of the S&P 500 stands at approximately $7.5 trillion in assets. An additional $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 purchased a single 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 which appears on quarterly statements.
This means retirement portfolios are mechanically adding to a stock that Morningstar values at roughly half its trading price, with ongoing losses and additional lockup tranches still ahead.
The S&P 500 remains the one major benchmark that excludes SpaceX, and actively managed funds retain discretion over whether to hold it.