Velvet

Less than 30 days after liftoff, SpaceX ($SPCX) arrived on the Nasdaq-100 – though it wasn’t quite the landing one expected, given the 6.8% single-day drop. The stock was added to the index at market open on Tuesday, triggering billions in passive buying by funds like the Invesco QQQ Trust ($QQQ). 

The inclusion comes after Nasdaq changed its listing rules in favour of ‘fast entry’ for mega-caps. It got rid of some major inclusion mandates: the 10% minimum free float and the three-month trading requirement.

It’s a big deal because SpaceX has a very small free float with just 5% of outstanding shares available to trade on the market. Nasdaq does have a float-adjustment in place, which gives SpaceX a 1% weight in the index for now. Much smaller than Nvidia’s ($NVDA) 12.10%, but bigger than Netflix’s ($NFLX) 0.82%. 

Bigger picture? Index-trackers being forced to buy shares could mean upward pressure on $SPCX that’s mechanical in nature, rather than reflecting the true value investors think the stock is worth. 

Value and momentum-driven investors will both be watching another Nasdaq listing this week. South Korean memory giant SK Hynix ($SKHY) will list on 12 July as an ADR. It plans to raise US$28B to fund massive new factories and buy advanced EUV scanners from ASML ($ASML).

SK Hynix is expected to hit an 81% DRAM gross margin in Q2, so memory-focused investors that already have a big appetite for Micron ($MU) and Sandisk ($SNDK) will have another name to watch. 

The SK Hynix listing makes sense for a company that wants exposure to an AI-hungry pool of capital. The same investors who have bid up chip stocks to the point where the semiconductor sector makes up 19% of the S&P 500. 

Meta ($META) has rallied 7% in the last week after the company shared plans to sell excess compute. The news was bearish for neoclouds like Nebius ($NBIS), which now faces the risk of its biggest client turning into a competitor.

Passive flows, fresh listings or a compute pivot, every move this week traces back to the same trade. Getting behind AI’s velvet rope, regardless of which door you choose.

This is not financial advice nor a recommendation to invest in any of the securities listed. The information presented is for general information purposes only and intended to be of a factual nature only. Past performance and forecasts are not a reliable indicator of future performance. The value of your investments can go down as well as up and you may receive back less than your original investment. The author of this article and other employees of Stakeshop Pty Ltd may hold positions or have financial interests in the company (or companies) discussed above. As always, do your own research and consider seeking financial, legal and taxation advice before investing.

Samy Sriram

Markets Analyst

Samy is a markets analyst at Stake, with seven years of experience in the world of investing, working across roles in private banking, venture capital and financial media. She has a Master’s degree in Finance and Data Analytics from The University of Sydney Business School.