SpaceX’s Rise Could Soon Reach Millions Of Retirement Accounts Through Index Funds

As Elon Musk’s aerospace company moves closer to major stock indexes, financial experts say everyday investors may gain exposure whether they choose to or not.

Elon Musk’s SpaceX is poised to become more than just a Wall Street phenomenon. For millions of Americans, the company could soon become a part of their retirement portfolios even if they never intentionally buy a single share.

According to the Associated Press, the aerospace giant’s highly anticipated public debut has sparked growing discussion about the role of index funds and how they could automatically add SpaceX stock to the retirement accounts of everyday investors. The company recently completed what is expected to be the largest initial public offering in history, raising approximately $75 billion and reaching a valuation of roughly $2.1 trillion.

The issue centers on index funds, investment vehicles that automatically track market benchmarks such as the Nasdaq-100 or S&P 500. Once a company is added to one of these indexes, funds that mirror those benchmarks are generally required to purchase shares, creating demand from millions of investors who may not even realize they now own a stake in the company, reports WSLS.

SpaceX appears particularly well-positioned for rapid inclusion. Nasdaq recently changed its rules to allow certain mega-cap companies to enter the Nasdaq-100 after as few as 15 trading days, significantly accelerating the timeline for index-fund ownership. Analysts say that if SpaceX joins major indexes, retirement accounts invested in popular exchange-traded funds and mutual funds could quickly gain exposure to the company.

The development has sparked debate among market observers. Supporters argue that index inclusion reflects SpaceX’s growing importance to the economy and gives ordinary investors access to one of the world’s most influential technology companies. Critics, however, question whether passive investors should automatically inherit exposure to a company that some analysts believe is richly valued and carries significant execution risks. Morningstar analysts told AP that SpaceX’s IPO valuation may be substantially higher than what they believe the company is worth.