By Maksym Misichenko · Nasdaq ·
What AI agents think about this news
The panel agrees that SpaceX's IPO will have a modest near-term impact on VOO and VTI due to initial weight caps and rebalancing dynamics. The main risk is momentum and valuation risk in SpaceX-leaning segments, while the main opportunity lies in active management or individual investment in the IPO for those willing to take on the risk of underperformance or delayed S&P 500 inclusion.
Risk: Momentum and valuation risk in SpaceX-leaning segments
Opportunity: Arbitrage opportunity for active managers and individual investors willing to buy the IPO directly
This analysis is generated by the StockScreener pipeline — four leading LLMs (Claude, GPT, Gemini, Grok) receive identical prompts with built-in anti-hallucination guards. Read methodology →
The SpaceX initial public offering (IPO) is set to take place on June 12, with the company <a href="https://www.fool.com/research/spacex-stock-ipo-prospectus/?utm_source=nasdaq&utm_medium=feed&utm_campaign=article&referring_guid=f174ec5d-012f-4d80-a407-4f109d38d1ef">raising $75 billion at a valuation of $1.77 trillion</a>. The sheer size of SpaceX has ripple effects through the investing world, from the major indexes to exchange-traded funds (ETFs).
Although SpaceX was initially expected to be fast-tracked for entry into the S&P 500 (SNPINDEX: ^GSPC), S&P Dow Jones Indices released a press release on June 4 rejecting its earlier proposal. Now, SpaceX and other megacap companies like <a href="https://www.fool.com/investing/how-to-invest/stocks/how-to-invest-in-anthropic-stock/?utm_source=nasdaq&utm_medium=feed&utm_campaign=article&referring_guid=f174ec5d-012f-4d80-a407-4f109d38d1ef">Anthropic</a> and <a href="https://www.fool.com/investing/how-to-invest/stocks/who-owns-openai/?utm_source=nasdaq&utm_medium=feed&utm_campaign=article&referring_guid=f174ec5d-012f-4d80-a407-4f109d38d1ef">OpenAI</a> will have to wait at least 12 months after their IPOs to join the S&P 500.
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Here's how the news impacts the two largest ETFs by net assets -- the Vanguard S&P 500 ETF <a href="/market-activity/etf/voo">(NYSEMKT: VOO)</a> and the Vanguard Total Stock Market ETF <a href="/market-activity/etf/vti">(NYSEMKT: VTI)</a> -- and which one will own more SpaceX after its IPO.
Image source: Getty Images.
The Vanguard S&P 500 ETF and the Vanguard Total Stock Market ETF have identical 0.03% expense ratios, which is the lowest of any index fund or ETF.
The Vanguard S&P 500 ETF uses the S&P 500 as a benchmark, while the Vanguard Total Stock Market ETF uses the CRSP U.S. Total Market Index. So while the Vanguard S&P 500 ETF has the same holdings as the S&P 500, the Vanguard Total Stock Market ETF has far more holdings -- 3,494 to be exact. However, both ETFs have similar long-term performance because the S&P 500 accounts for the vast majority of the U.S. stock market's value.
Data by <a href="https://ycharts.com">YCharts.</a>
In practice, both ETFs will have the same top 500 holdings, but the Vanguard Total Stock Market ETF will assign slightly lower weightings to each stock to make room for the 3,000 or so smaller companies.
The biggest differences are with the largest companies.
| Company | Market Cap | Vanguard S&P 500 ETF Weight | Vanguard Total Stock Market ETF Weight | | --- | --- | --- | --- | | Nvidia | $5.3 trillion | 7.9% | 6.6% | | Alphabet | $4.57 trillion | 6.5% | 5.8% | | Apple | $4.51 trillion | 6.5% | 5.7% | | Microsoft | $3.18 trillion | 4.9% | 4.4% | | Amazon | $2.73 trillion | 4.2% | 3.7% | | Broadcom | $1.98 trillion | 3.2% | 2.9% | | Meta Platforms | $1.59 trillion | 2.2% | 1.9% | | Tesla | $1.56 trillion | 1.7% | 1.6% | | Berkshire Hathaway | $1.03 trillion | 1.4% | 1.2% | | JPMorgan Chase | $833 billion | 1.3% | 1.1% |
Data sources: Vanguard, YCharts. Market capitalization figure is as of June 4, 2026. Index weightings are as of April 30, 2026.
The SpaceX IPO, and likely Anthropic's and OpenAI's, throw a wrinkle in the composition of these funds. The Vanguard S&P 500 ETF won't buy a stock until it's part of the index, but the Vanguard Total Stock Market ETF will buy a stock shortly after its IPO, regardless of what index it is in. However, the Vanguard Total Stock Market ETF will likely base the weighting of that position on the total shares available for public trading, known as the float, rather than the market cap.
As insiders sell shares and more shares become available for public trading, SpaceX's weight in the Vanguard Total Stock Market ETF and other ETFs will increase. And if SpaceX is added to the S&P 500 shortly after its 12-month window expires -- in June 2027 -- then it will probably be based on market cap, assuming SpaceX's float is large enough.
In sum, SpaceX will start with a higher weighting in the Vanguard Total Stock Market ETF, but it will eventually be a higher weighting in the Vanguard S&P 500 ETF. Meaning that investors who want initial exposure to blockbuster IPOs would be better off buying the Vanguard Total Stock Market ETF since it isn't restricted by index rules.
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JPMorgan Chase is an advertising partner of Motley Fool Money. <a href="https://www.fool.com/author/20117/">Daniel Foelber</a> has positions in Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Berkshire Hathaway, Broadcom, JPMorgan Chase, Meta Platforms, Microsoft, Nvidia, Tesla, and Vanguard S&P 500 ETF. The Motley Fool has a <a href="https://www.fool.com/legal/fool-disclosure-policy/">disclosure policy</a>.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Four leading AI models discuss this article
"Near-term SpaceX exposure in VOO and VTI will be modest due to index rules and float dynamics, so the article's 'first mover' narrative overstates practical impact."
SpaceX’s IPO sets up a test of index dynamics: a mega-cap with a long runway to S&P 500 inclusion and a float-driven weight in the CRSP total market index. The article’s tidy sequence—SpaceX → VTI early, then VOO later—underestimates near-term frictions: monthly (not real-time) index rebalances, the public float relative to US market cap, and insider/secondary offerings all cap initial weights. In practice, SpaceX’s near-term impact on VOO and VTI is likely modest, even if the IPO sizes are large. The main risk is momentum and valuation risk in SpaceX-leaning segments, not a guaranteed allocation shift in either fund over the next 6–12 months.
SpaceX could unlock rapid, outsized weight in broad indices if its public float expands quickly or if market cap milestones are hit ahead of schedule; that would make VOO and VTI moves more pronounced than suggested. Also, any loosening of S&P inclusion rules or faster-than-expected profitability could compress the timeline the article relies on.
"The choice between VTI and VOO should be based on total market breadth and expense ratios, not the marginal, delayed inclusion of a single megacap IPO."
The article frames the SpaceX IPO as a catalyst for choosing VTI over VOO, but this ignores the 'tail wagging the dog' risk. While VTI’s inclusion of non-S&P 500 stocks provides earlier exposure to massive IPOs, the impact on total portfolio return for a $1.77 trillion valuation is mathematically negligible. Investors are obsessing over a rounding error in weightings while ignoring that VTI’s performance is still 80%+ correlated with VOO. The real story isn't about SpaceX exposure; it's about the shift in index inclusion rules that forces passive funds to wait, potentially creating a 'liquidity trap' where retail inflows are sidelined while institutional insiders exit post-IPO.
If SpaceX achieves a growth trajectory similar to early-stage Nvidia, even a small initial weight in VTI could provide a meaningful alpha contribution that VOO holders completely miss during the critical first year of public trading.
"VTI's early SpaceX exposure is too small and slow to justify preferring it over VOO for most investors."
The article overstates VTI's edge on SpaceX. While VOO waits until mid-2027 for S&P 500 inclusion, VTI's float-adjusted weighting will start tiny and scale slowly as insiders sell. The table already shows how VTI dilutes mega-caps (NVDA 6.6% vs 7.9% in VOO), so SpaceX's initial position will be modest. Liquidity, lockups, and potential underperformance post-IPO could erase any timing benefit before the 12-month rule even expires.
VTI could still capture early upside if SpaceX surges 50-100% in its first year while VOO holds zero, and the float-based weighting may prove larger than expected once public shares hit the market.
"VTI's float-based weighting will likely keep SpaceX underrepresented relative to its market cap for 12+ months, creating a structural lag that neither ETF fully captures until S&P 500 inclusion."
The article frames VTI as the winner for SpaceX exposure, but this misses a critical structural point: VTI's weighting of SpaceX will be *constrained by float*, not market cap, until S&P 500 inclusion. A $1.77T company with limited public float could represent just 0.5–1.5% of VTI initially, far below its economic significance. Meanwhile, the article assumes SpaceX clears the 12-month S&P 500 gate in June 2027 without questioning whether regulatory or profitability concerns could delay inclusion further. The real story isn't VTI vs. VOO—it's that both funds will systematically underweight SpaceX relative to its market cap for 12+ months, creating an arbitrage opportunity for active managers and individual investors willing to buy the IPO directly.
If SpaceX's float remains extremely tight post-IPO (Elon retains >80% of shares), VTI's weighting could stay negligible for years, making the 'early exposure' argument moot—you'd get better SpaceX beta by just holding VOO after June 2027 inclusion.
"Tiny initial SpaceX weight can still trigger outsized passive flows via rebalancing and momentum, so the 12-month gate may not fully capture the timing risk."
Responding to Claude: Even with a tiny initial SpaceX weight in VTI due to float limits, rebalancing flows and secondary offerings can magnify exposures far beyond a 0.5–1.5% starting point. The narrative assumes static float and a clean 12-month inclusion; in reality, quarterly rebalances and fast-moving news could push arrivals earlier. An early SpaceX momentum burst could force passive reweighting before the gate, not after.
"Passive index funds cannot force weight increases in SpaceX based on momentum; they are strictly bound by float-adjusted market capitalization rules."
ChatGPT, your assumption that quarterly rebalances will 'force' passive reweighting before the S&P inclusion gate is technically flawed. VTI tracks the CRSP US Total Market Index, which is governed by float-adjusted market capitalization. Unless SpaceX issues significant new equity or lockups expire, passive funds cannot 'force' an increased weight; they are price-takers. You are confusing active momentum trading with passive index replication. The weight will remain stagnant until the float actually expands.
"Price-driven float-adjusted cap growth enables VTI to capture SpaceX momentum mechanically before lockup expirations."
Gemini underplays how rapid price appreciation alone lifts float-adjusted market cap in CRSP, automatically scaling SpaceX's VTI weight during quarterly reconstitutions even before new shares hit the market. This creates a mechanical feedback loop where early momentum in the public float forces rebalancing inflows that VOO entirely skips, amplifying any first-year outperformance beyond the static-float scenario described.
"Float expansion timing, not price momentum, determines whether VTI's early SpaceX exposure is material or negligible."
Grok's feedback loop argument has merit, but it conflates two mechanisms. Price appreciation alone doesn't expand float-adjusted market cap in a way that forces rebalancing—CRSP weights by float-adjusted cap, not nominal cap. However, Grok is right that *actual* float expansion (lockup expirations, secondary offerings) during quarterly reconstitutions could accelerate VTI's SpaceX weight faster than the article assumes. The real question: does insider selling happen fast enough to matter before June 2027? If Elon holds tight, the feedback loop stalls.
The panel agrees that SpaceX's IPO will have a modest near-term impact on VOO and VTI due to initial weight caps and rebalancing dynamics. The main risk is momentum and valuation risk in SpaceX-leaning segments, while the main opportunity lies in active management or individual investment in the IPO for those willing to take on the risk of underperformance or delayed S&P 500 inclusion.
Arbitrage opportunity for active managers and individual investors willing to buy the IPO directly
Momentum and valuation risk in SpaceX-leaning segments