Index Inclusion

SpaceX’s recent IPO is setting a precedent for future mega-cap tech debuts, particularly in AI. Its rapid inclusion in major stock indexes like the Russell 1000 and Nasdaq-100 offers a potential blueprint for companies like Anthropic and OpenAI. While market conditions are critical, SpaceX’s strong performance and high valuation signal investor appetite for disruptive potential and long-term vision.

SpaceX’s IPO has seen a significant stock surge, briefly surpassing Amazon’s market cap. However, its current valuation is questionable, lacking true price discovery due to a pre-determined IPO price and accelerated index inclusion rules. These changes compel index funds to buy shares, inflating the price. The stock’s true value remains uncertain, with future volatility expected as lock-up periods expire and float increases.

USA Rare Earth (USAR) announced its preliminary inclusion in the Russell 2000 Index, according to the FTSE Russell Preliminary List of IPO Additions. The inclusion is projected to take effect on December 22, 2025, pending the completion of FTSE Russell’s standard review procedures. Membership will also include USAR in the Russell 3000 Index and style indexes. Russell indexes are widely used by investment managers and as the basis for index-linked investment products.

AppLovin (APP) and Robinhood (HOOD) shares jumped 7% after-hours following S&P Global’s announcement of their inclusion in the S&P 500, effective September 22nd. AppLovin replaces MarketAxess (MKTX), and Robinhood replaces Caesars Entertainment (CZR). This is a significant validation, especially for Robinhood. While index inclusion typically boosts share prices, the long-term benefits for AppLovin, in the competitive mobile advertising sector, and Robinhood, requiring sustained profitability, remain to be seen.