The SpaceX IPO Is Days Away: Could the Stock Join the S&P 500, and How Soon?

On Friday, SpaceX (NASDAQ: SPCX) is expected to begin trading on the Nasdaq in what would be the largest initial public offering (IPO) on record. The rocket and satellite company plans to sell about 556 million shares at $135 apiece, giving it an initial market value of about $1.77 trillion and raising about $75 billion. Investor demand has reportedly topped $250 billion -- more than three times what the company is seeking.

A market value of $1.77 trillion would make SpaceX about the seventh-most valuable company in the U.S. Yet nearly every company near that scale has something SpaceX won't: a spot in the S&P 500, the benchmark behind trillions of dollars of index funds.

So, could the stock join the index -- and how soon? Here's a closer look at the S&P 500's actual rules, and what Tesla's (NASDAQ: TSLA) long-delayed inclusion suggests about the answer.

Image source: Getty Images.

The rules standing in SpaceX's way

Getting into the S&P 500 takes more than size. S&P Dow Jones Indices, which runs the index, requires a candidate to be a U.S. company with a market value of at least $22.7 billion -- a bar SpaceX would clear about 78 times over.

The tougher tests, however, come next.

For starters, at least 10% of a company's shares must be available for public trading, and a newly listed stock must trade for at least 12 months before it can be considered. SpaceX's IPO covers only about 4% of its roughly 13.1 billion shares outstanding.

Then there's the most demanding test: profitability. A candidate must report positive earnings under generally accepted accounting principles (GAAP) in its most recent quarter, and its past four quarters combined must be profitable, too. SpaceX isn't close. Its prospectus shows a net loss of $4.9 billion in 2025, followed by a $4.3 billion net loss in the first quarter of 2026 alone.

That's not because the whole business loses money. SpaceX's connectivity segment, driven by the Starlink satellite internet service, grew revenue about 50% to $11.4 billion in 2025 and produced an operating profit of about $4.4 billion. But the artificial intelligence (AI) segment, built around the recently acquired xAI, lost about $6.4 billion at the operating level last year. And the company poured $12.7 billion into AI data centers and computing power last year.

Investors hoping the index might bend its rules recently got their answer.

In April, S&P Dow Jones Indices floated changes that would have shortened the waiting period and waived the profitability and float tests for megacap companies. But on June 4, the index provider said no changes would be made, noting the decision "preserves core index principles by maintaining consistent application of these key requirements."

Interestingly, the Nasdaq-100 is a different story. Under rules that took effect in May, a newly listed company ranked among the index's top 40 constituents by market value can be added after just 15 trading days. Funds tracking that benchmark, therefore, could become buyers of SpaceX within weeks.

What Tesla's long wait suggests

For a sense of how this could play out, look at another company Elon Musk leads.

Tesla went public in June 2010 and didn't join the index until December 2020. Why did it take so long? The electric vehicle maker couldn't pass the earnings test until it posted a fourth consecutive quarter of GAAP profits in mid-2020.

Even then, the index committee passed Tesla over at its September 2020 rebalancing before announcing the addition in November. By the time the stock joined on Dec. 21, 2020, shares had climbed more than 50% from the announcement, and index funds needed to buy about $85 billion of Tesla stock -- the largest rebalancing in the index's history.

Could SpaceX follow a similar path?

The 12-month clock starts Friday, so the company couldn't even be considered until mid-2027. And the financial test may take longer. For SpaceX's trailing four quarters to add up to a profit, quarterly earnings would need to outweigh losses like the $4.3 billion reported in Q1. Starlink's momentum could eventually get it there -- the service counted 10.3 million subscribers at the end of March after its subscriber base doubled in 2025. But management's heavy spending on AI suggests near-term profits aren't the priority.

Of course, the index isn't everything.

Tesla delivered huge returns long before joining the S&P 500 -- shares soared about 400% in 2020 before the inclusion announcement -- and SpaceX could similarly reward shareholders on its own merits.

Still, I think the index question highlights what a SpaceX investment is today: a bet on a company choosing growth over profits. A wave of forced index buying could one day be a powerful catalyst for the stock, but it's just unlikely to come soon. After all, the S&P 500 isn't making a megacap exception here -- even for the largest IPO in history.

Daniel Sparks has clients with positions in Tesla. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.