SpaceX Is Declining: Could This Unstoppable ETF Be the Best Way to Invest in It This Year?
Key Points
SpaceX joined the Nasdaq-100 sooner than expected after the exchange revised its inclusion methodology.
SpaceX now accounts for just over 1% of the Nasdaq-100.
The Invesco Nasdaq QQQ ETF has consistently outperformed the market since its inception.
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Since Space Exploration Technologies (NASDAQ: SPCX) debuted on the stock market on June 12, it has been on a rollercoaster ride. SpaceX, as it is better known, saw an expected jump in its first couple of trading days because of what was clearly high demand for the stock, but it is now down over 28% from its June 16 high (as of the July 13 market open).
SpaceX's stock is likely to be a roller-coaster ride for the foreseeable future, but investors are now getting exposure to it through one of the market's most popular ETFs. Some investors appreciate the newly added holding, while others aren't too keen. In either case, does SpaceX's addition position it to be one of the best ETFs to hold this year?
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Image source: The Motley Fool.
The Nasdaq makes a special case
The Invesco Nasdaq QQQ ETF (NASDAQ: QQQM) is now many investors' introduction to SpaceX. The Nasdaq-100 is an index that tracks the 100 largest non-financial companies trading on the Nasdaq stock exchange. Since SpaceX checks both of those boxes, it's officially in the index -- but much quicker than any other company has before.
Typically, to be included in the Nasdaq-100, a company must have traded for three months and meet trading volume requirements. The Nasdaq changed those requirements to make it easier to usher SpaceX into the index. Now, a company must only trade for 15 days, which made SpaceX eligible for the index on July 6.
Where will SpaceX fit in the Nasdaq-100?
Although QQQM isn't a pure-play tech ETF, it's dominated by tech companies. Here are its top 10 holdings as of July 10:
| Rank/Company | Percentage of QQQM Portfolio |
|---|---|
| 1. Nvidia | 8.01% |
| 2. Apple | 7.27% |
| 3. Micron Technology | 4.79% |
| 4. Microsoft | 4.49% |
| 5. Amazon | 4.14% |
| 6. Advanced Micro Devices | 3.94% |
| 7. Alphabet (Class A) | 3.27% |
| 8. Tesla | 3.20% |
| 9. Meta Platforms | 3.11% |
| 10. Alphabet (Class C) | 3.04% |
Data source: Invesco.
As of market open on July 13, SpaceX is the sixth-most-valuable company on this list, but it won't be weighted that way. The weighting is based on a company's float (shares available to the general public), and since SpaceX's is very small right now (around 4%), it won't jump ahead of companies like Tesla and Meta, which have lower market caps. SpaceX's percentage in QQQM is currently 1.21%.
Is QQQM the best investment of 2026?
SpaceX aside, QQQM is one of the best ETFs if you're looking for lots of tech exposure without being fully dependent on the sector. It's 68.5% tech stocks, so there's still a slight hedge if the sector hits a rough period, which isn't far-fetched considering how expensive tech stocks have become.
If we're only using performance to define the "best" investment this year, then QQQM likely won't be the winner. So far, though, it's up 18.3%, which is still a great return.
If you're looking for an ETF that can consistently outperform the market over the long run, then QQQM should be right up your alley. It has historically done so and is built to continue doing so (though nothing is guaranteed in the stock market). Let that be the reason you invest, not because of SpaceX's new entry.
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Stefon Walters has positions in Apple and Microsoft. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, Meta Platforms, Micron Technology, Microsoft, Nvidia, and Tesla. The Motley Fool recommends Nasdaq. The Motley Fool has a disclosure policy.
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