When Elon Musk Talks, Nasdaq and the S&P 500 Must Listen

By Rich Smith – Mar 16, 2026 at 5:05AM ESTKey PointsIn just a few months, SpaceX could hold one of the biggest IPOs in history -- $1.75 trillion.Media report that Elon Musk wants the Nasdaq-100 and S&P 500 to change their rules to admit SpaceX early.Index inclusion could force more investors to buy SpaceX stock."Where does an 800-pound gorilla sit? Anywhere it wants to." This ancient proverb/children's riddle took on new life in the stock market last week, when rumors began floating that the biggest "gorilla" in the space industry is throwing its weight around Wall Street, demanding special treatment from both the Nasdaq stock exchange and the S&P 500 itself. Apparently, no one wants to say "no" to Elon Musk. Image source: SpaceX. What's up on the Nasdaq this week? Let's start this story with the Nasdaq, where Reuters reports Musk is demanding "early index entry" for SpaceX into the Nasdaq-100 index, which tracks the performance of the 100 biggest companies on the Nasdaq. Musk is preparing to IPO SpaceX, you see, and at an apparent $1.75 trillion valuation. Yes -- Elon Musk (@elonmusk) March 2, 2026 As part of its IPO preparations, SpaceX will decide whether to list its shares on the NYSE or the Nasdaq. Both stock exchanges want the listing, not just for the prestige of having SpaceX on their exchange, but also for the transaction fees a SpaceX listing would generate over time. Musk may be using this desire to win the SpaceX listing to bully Nasdaq into bending its rules. Ordinarily, Nasdaq waits about a year after a company IPOs to give its stock price a chance to settle into an accepted valuation before deciding whether it deserves a place in the index. Nasdaq, however, is considering setting up a new "Fast Entry" procedure for popular large-cap stocks. This would permit a newly IPO'ed stock to join the Nasdaq-100 in as little as a month -- assuming its market capitalization ranks among the 40 biggest stocks on the index. If SpaceX IPOs at $1.75 trillion, it would easily fit this new definition, ranking No. 6 behind Nvidia (NVDA 1.56%), Apple (AAPL 2.15%), Microsoft (MSFT 1.57%), Amazon (AMZN 0.87%), and Alphabet (GOOG 0.58%) (GOOGL 0.42%). Just as importantly for SpaceX, inclusion will require fund managers who track the index to purchase SpaceX shares once SpaceX joins the Nasdaq-100. This would create buying pressure, lifting SpaceX's stock price after the IPO. What's more, inclusion in a widely held index such as the Nasdaq-100 (or S&P 500) -- both widely held by institutional investors -- can reduce the impact of early investors selling the stock after its post-IPO lockup periods expire, preventing large sales from driving the stock price down too much. Best case scenario: A popular SpaceX IPO shoots higher on IPO day, then receives a second wind when fund managers are forced to buy it for their funds tracking the Nasdaq-100 index. Later, widespread institutional ownership helps SpaceX stock hold onto these gains. Win. Win. Win! SpaceX and the S&P 500 The story surrounding the S&P 500 is similar. Bloomberg reported last week that S&P Dow Jones Indices LLC, a subsidiary of S&P Global (SPGI +0.65%), may "fast-track SpaceX's entry after its IPO" into this index as well. Once again, doing so would require the index to change its own rules to accommodate Elon Musk's wishes -- cutting the ordinary lag between IPO and index inclusion from 12 months to... something less than 12 months. Once again, a buying frenzy would ensue. And once again, a successful entry would include SpaceX in a popular, widely imitated index tied to some $24 trillion in global investments. Any selling by early SpaceX investors, cashing in their SpaceX shares post-IPO, would be mitigated by owners of funds that imitate the S&P 500 holding onto their indexed shares (and by extension, their SpaceX shares), providing ballast and reducing the price volatility of SpaceX stock. What could go wrong? Is there any downside to any of the above for SpaceX investors? In the short term, probably not. Musk's machinations -- assuming this is what is going on -- would appear calculated to turbocharge his SpaceX IPO, drive the stock price higher, and then help keep it there. Granted, valuation may matter for SpaceX eventually, after the buying pressure from index inclusion subsides. Even widely held S&P 500 stocks can still go down once enough investors decide they're too expensive. Updating the math from my most recent valuation of SpaceX, which was based on a $1.5 trillion IPO, to the new expected valuation of $1.75 trillion, I estimate SpaceX may IPO at a price-to-sales ratio as high as 110, and a price-to-earnings ratio of more than 580. At those kinds of prices, I won't risk investing in SpaceX. Will you?Read NextMar 15, 2026 •By Courtney CarlsenBetter Nuclear Energy Stock: Oklo vs. Centrus EnergyMar 15, 2026 •By Daniel MillerThe Fastest Stock That Could Unlock Investor Riches ... SlowlyMar 15, 2026 •By Ryan VanzoMy Top Growth Stock to Buy for 2026 (and It's Not Even Close)Mar 15, 2026 •By Daniel Miller1 Top Growth Stock Turned $10,000 Into $423,000 -- It's Still a Buy NowMar 15, 2026 •By Catie Hogan1 Reason Why April Could Be Huge for RivianMar 15, 2026 •By Anders BylundBuying Tesla Stock Taught Me a Costly LessonAbout the AuthorRich Smith is a contributing Motley Fool defense and stock market analyst covering publicly traded and emerging companies in defense, space, aerospace, and other sectors. Prior to The Motley Fool, Rich practiced international corporate law for Clifford Chance in Russia, and for the Russian-Ukrainian Legal Group in Moscow, Kyiv, and Washington, D.C. He holds a bachelor’s degree in international relations from the College of William & Mary, a law degree from the University of Baltimore, and a language certification from the International Institute of Russian Language & Culture in Tver, Russian Federation. The Globe and Mail once featured him as “one of the best stock pickers since 2009.”TMFDittyX@RichSmithFoolStocks MentionedAppleNASDAQ: AAPL$250.12(-2.21%)-$5.64MicrosoftNASDAQ: MSFT$395.55(-1.57%)-$6.31AlphabetNASDAQ: GOOGL$302.28(-0.42%)-$1.27AmazonNASDAQ: AMZN$207.67(-0.89%)-$1.86NvidiaNASDAQ: NVDA$180.28(-1.56%)-$2.87S&P GlobalNYSE: SPGI$422.49(+0.67%)+$2.79AlphabetNASDAQ: GOOG$301.46(-0.58%)-$1.75*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.