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S&P500 doesn't change rules for AI companies
Posted on 6/5/26 at 9:33 pm
Posted on 6/5/26 at 9:33 pm
quote:
SpaceX has requested unusually swift entry into several leading stock market indexes as a condition of its historic stock market debut. But the S&P 500 stock market index representing many of the largest profitable US companies has surprised market analysts by refusing to bend the rules for Elon Musk’s AI company.
quote:
But in its final decision, the S&P Dow Jones Indices stated that “no changes will be made to the eligibility criteria including financial viability screens, seasoning period, or minimum IWF.” Even after the standard yearlong wait, SpaceX, Anthropic, and OpenAI may struggle to deliver the consistent profitability necessary to qualify for the S&P 500.
quote:
The denial of accelerated S&P 500 entry for SpaceX comes just days after Morningstar analysts described SpaceX as having been “significantly overvalued” in the lead-up to its IPO. The investment research firm valued SpaceX at $780 billion—less than half of SpaceX’s $1.75 trillion IPO goal—primarily based on the strengths of SpaceX’s Starlink satellite service and rocket launch business.
Finally common sense... It's not a lot to ask to be profitable for four straight quarters before being added.
Ars tech source
2
Posted on 6/5/26 at 10:32 pm to UltimaParadox
My entire retirement relies on the strength of the S&P. Good on them
Posted on 6/5/26 at 10:47 pm to UltimaParadox
I didn't like that SpaceX had appealed for a change to SP Global's rules or that they even considered it. Had SPGI capitulated, they would've undermined the process. It maintains the integrity of the index and eliminates special treatment.
Look how long it took $TSLA to get added and they had a huge market cap when they finally got in. They would get close, but then report a loss for the most recent quarter which meant they would not qualify for that regular cycle addition.
GAAP positive earnings on a cumulative basis for the 4 most recent quarters with positive GAAP for the latest quarter is just one of many metrics. Market cap size is not the deciding factor either. If it were, $MRVL would've gotten in earlier in the year with the March rebalance or in the April or May additions this year since its market cap was larger than the others that were added.
Look how long it took $TSLA to get added and they had a huge market cap when they finally got in. They would get close, but then report a loss for the most recent quarter which meant they would not qualify for that regular cycle addition.
GAAP positive earnings on a cumulative basis for the 4 most recent quarters with positive GAAP for the latest quarter is just one of many metrics. Market cap size is not the deciding factor either. If it were, $MRVL would've gotten in earlier in the year with the March rebalance or in the April or May additions this year since its market cap was larger than the others that were added.
Posted on 6/6/26 at 12:13 am to CecilShortsHisPants
quote:
My entire retirement relies on the strength of the S&P.
Why?
Posted on 6/6/26 at 1:48 am to Everyday Is Saturday
quote:. Because I’m 37 and 100% of my 401k is an S&P index fund
Why?
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