Elon Musk’s SpaceX is valued at around $2.1 trillion|@Nasdaq|X

SpaceX will officially become part of the Nasdaq-100 today, marking another milestone for Elon Musk’s rocket and artificial intelligence company just weeks after its stock market debut.

The move is expected to increase demand for the company’s shares as billions of dollars from index-tracking funds automatically flow into the stock.

Mutual funds and exchange-traded funds (ETFs) that follow the Nasdaq-100, managing about $800 billion in assets, will buy SpaceX shares to match the index, according to The Wall Street Journal.

Although SpaceX is valued at around $2.1 trillion, it will account for less than 1% of the Nasdaq-100 at first. That’s because only a small percentage of its shares were sold in last month’s initial public offering, while most employee-held shares remain locked up and cannot yet be traded.

Nasdaq determines a company’s index weight using its publicly available shares rather than its total market value.

The Invesco QQQ ETF, one of the largest ETFs in the world, will be the biggest buyer of the stock. Lower-cost alternatives, including State Street’s SPDR Portfolio Nasdaq-100 fund and Invesco’s QQQM ETF, also track the same index.

Joining the Nasdaq-100 gives SpaceX greater exposure because millions of investors own funds linked to the index. The Nasdaq inclusion would add the stock to millions of passive investment portfolios.

The automatic buying could support the stock price in the near term. 

However, analysts say long-term performance will depend on the rocket company’s financial results, business growth and investor confidence. They also expect more shares to enter the market after employee lock-up periods expire, potentially creating selling pressure in the months ahead.

Newly public companies typically wait months for index inclusion, but Nasdaq has created a fast-track process for megacap stocks. SpaceX is the first beneficiary, with Anthropic and OpenAI likely to follow after their IPOs. The S&P 500, however, rejected SpaceX’s request for expedited entry.