S&P refuses to bend rules for SpaceX and AI giants

S&P Dow Jones Indices announced that it won’t change its rules for joining the S&P 500. This means SpaceX and other huge new public firms, called megacaps, can’t immediately become part of the benchmark that guides loads of investment money around the world.

SpaceX is gearing up for what could be the biggest-ever IPO, with a $1.75 trillion value and an aim to raise $75 billion. Now, passive index funds holding trillions can’t just swoop in to buy SpaceX shares because the company isn’t in the S&P 500 yet.

S&P DJI is sticking to its rule requiring companies to post at least one year of profits. So, for now, S&P Global is stopping a giant rush of funds from flowing into these stocks—that would occur if these firms had more attractive index listings.

S&P 500 rejects proposed changes to IPO eligibility

The index provider started a public consultation on April 30, asking if the three main rules for big new companies to be listed on the S&P 500 Index should be relaxed. 

These 3 eligibility requirements include:

• A 12-month seasoning requirement — A company must generally trade publicly for at least one year before becoming eligible for inclusion.
• 10% public float requirement — At least 10% of a company’s shares must be available for public investors to trade.
• GAAP profitability requirement — A company must report positive Generally Accepted Accounting Principles (GAAP) earnings in its most recent quarter and across the sum of its four most recent quarters.

On all three counts, the answer was no.

S&P DJI said in its announcement that “exceptions to the financial viability, seasoning, and IWF requirements should not be granted solely based on market capitalization.” IWF, or Investable Weight Factor, is S&P’s measure of a company’s publicly tradable share float and is used to determine the portion of shares eligible for index weighting.

The committee recognized a conflict between rigid eligibility rules and widespread market representation. Still, they decided their indices already offer “substantial market coverage and sector balance,” as stated in S&P’s press release.

Why SpaceX IPO still fails S&P 500 test

SpaceX reported a net loss of $4.94 billion in 2025, despite revenues of $18.67 billion — that’s a 33% jump from the year before. Under current guidelines, SpaceX can’t join the S&P 500 until it shows four straight profitable quarters using GAAP accounting.

“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,” said Art Hogan, chief market strategist at B. Riley Wealth, in comments reported by Reuters. Earlier, Cryptopolitan reported that the 2026 IPO market might be stealing the playbook from crypto launches.

Profitability has always been a huge hurdle for companies’ inclusion in the S&P 500. For instance, Tesla became part of the index only in December 2020 after waiting years. Similarly, Uber and Airbnb spent lots of time in different indices before getting the nod from the S&P committee.

This decision affects more than just SpaceX. Companies like Anthropic and OpenAI face similar requirements as they are thinking about going public.  These firms haven’t shown the consistent GAAP profits that the S&P 500 needs.

If you're reading this, you’re already ahead. Stay there with our newsletter.