They're just sticking by them. Just because it's Elon Musk.
As SpaceX prepares to enter public markets at a valuation that would place it among America's most powerful companies, the S&P 500 has quietly reaffirmed an old conviction: size is not the same as soundness. By holding firm on profitability requirements that rival indexes have abandoned, the committee governing the world's most watched benchmark has drawn a line between spectacle and substance — one that SpaceX, OpenAI, and Anthropic may all spend years crossing. It is a reminder that the most enduring institutions sometimes earn their authority precisely by refusing to be moved.
- SpaceX begins trading June 12 at a $1.8 trillion valuation, yet faces a potential two-year exile from the index that defines mainstream American investing.
- S&P Dow Jones Indices formally rejected loosening its profitability rules, even as Nasdaq and FTSE Russell rewrote theirs to welcome SpaceX within days of its debut.
- The decision carries enormous financial weight — immediate S&P inclusion would have forced passive funds to absorb roughly $14 billion in SpaceX shares alone.
- OpenAI and Anthropic, each eyeing trillion-dollar IPOs, now face the same reckoning: chase profitability or accept years outside the benchmark while spending aggressively on growth.
- Analysts and strategists largely defend the committee's discipline, pointing to Amazon and Uber as proof that missing the index early is a delay, not a defeat.
SpaceX is going public at a $1.8 trillion valuation — a figure that would rank it among the seven most valuable companies in America, surpassing even Tesla. Yet for all that scale, the S&P 500 will not have it. Not yet.
On Thursday, the S&P Dow Jones Indices committee formally rejected a proposal to relax its profitability requirement, the rule that demands a company show positive net income for the prior year, including its most recent quarter. SpaceX doesn't clear that bar. Analysts at Evercore ISI don't expect the company to turn an annual profit until 2027, which pushes realistic S&P 500 entry to 2028 at the earliest. Nasdaq and FTSE Russell moved in the opposite direction, shortening their waiting periods to allow SpaceX entry within days of its June 12 debut. The S&P held firm.
The same wall awaits the next wave. Anthropic and OpenAI are both weighing IPOs at potential trillion-dollar valuations, but neither is on a clear path to sustained profitability. Anthropic may post a profitable quarter soon, but expects to burn through that margin as it scales computing infrastructure. OpenAI isn't projected to be profitable for years. Like SpaceX, they face a strategic choice: slow down to qualify for the index, or spend aggressively and wait.
The financial consequences of exclusion are real. Immediate S&P inclusion for SpaceX would have triggered roughly $14 billion in forced buying by passive funds. For OpenAI and Anthropic, those figures approach $8 and $9 billion respectively. Goldman Sachs projects SpaceX's capital expenditures will exceed $360 billion by 2030, with free cash flow deeply negative through 2029 before turning sharply positive in 2031.
Defenders of the rule acknowledge it is the hardest to justify for companies that are profitable in parts but spending heavily on the future. Yet market strategists and academics largely support the committee's restraint. Amazon and Uber both spent years outside the benchmark while building dominant businesses. The S&P 500 isn't closing the door — it is simply asking these companies to prove, in the oldest way possible, that they work.
SpaceX is about to go public at a $1.8 trillion valuation—a number so large it would rank the company among the seven most valuable firms in America, eclipsing even Elon Musk's Tesla. Yet despite that staggering size, the rocket and satellite maker will not be allowed into the S&P 500 for years, blocked by a rule that refuses entry to unprofitable companies.
The S&P Dow Jones Indices committee made this decision official on Thursday, rejecting a proposal that would have loosened the profitability requirement. The rule is straightforward: to join the index, a company must have generated positive net income for the past year, including the most recent quarter. SpaceX doesn't meet that standard yet. Analysts at Evercore ISI forecast the company won't turn an annual profit until 2027, which means entry to the S&P 500 could be delayed until sometime in 2028 at the earliest.
The timing is notable because SpaceX begins trading on June 12. Other indexes have already moved faster. Nasdaq changed its rules to allow SpaceX entry in just 15 trading days, down from the previous three-month waiting period. FTSE Russell shortened its timeline to five trading days. But the S&P 500, the world's most prestigious stock index, is holding firm. The decision reflects a tension between the gravitational pull of mega-IPOs and the institutional discipline of index governance.
SpaceX is not alone in this predicament. Anthropic and OpenAI are both weighing public offerings and could face the same barrier despite expected valuations exceeding $1 trillion each. Anthropic is projected to post $559 million in operating profit for the June quarter, but the company doesn't expect to remain profitable as it ramps up spending on computing resources. OpenAI isn't expected to be profitable in the coming years at all. For these companies, the choice is strategic: they can either pursue profitability now or invest aggressively in growth and accept a longer wait to enter the S&P 500.
Lawrence Creatura, a fund manager at PRSPCTV Capital, notes that this trade-off isn't irrational. Amazon and Uber both went public years before joining the benchmark, choosing to run at losses while building their empires. "It will mean you won't be in the S&P 500 for the moment," Creatura said. "But look at those companies now." The implication is clear: missing the index early is not a death sentence.
The financial stakes are substantial. If SpaceX had been allowed immediate entry, passive index funds would have been forced to buy roughly $14 billion of its stock. OpenAI would have triggered about $8 billion in forced buying, and Anthropic close to $9 billion. These sums reflect the sheer weight these companies would carry in a portfolio indexed to the S&P 500. Goldman Sachs and Evercore ISI project SpaceX's capital expenditures will balloon to more than $360 billion by 2030, up from over $20 billion last year. The company is expected to burn through negative $105 billion in free cash flow in 2029 before swinging to positive $72 billion in 2031.
Howard Silverblatt, former senior index analyst at S&P Dow Jones, acknowledges that the profitability requirement is "the hardest one for the S&P to defend," particularly for companies like SpaceX that are spending heavily on research and development while maintaining profitable business lines. Yet the index committee held the line anyway. Michael Antonelli, a market strategist at Baird, sees this as the right call. "They have rules about profitability and index inclusion and they're just sticking by them," he said. "Just because it's Elon Musk and SpaceX, I don't think that they're willing to change something that's hard coded into their product."
Jay Ritter, an emeritus professor at the University of Florida who directs the IPO Initiative, frames the delay as ultimately beneficial. "Eventually these mega-IPOs will be added to the S&P 500, unless their business models fail, so it is a question of timing," he said. "Given the low floats and the huge amounts of money indexed to the S&P 500, I think it's good that they'll wait until the stocks have a more liquid market." The S&P 500 is not rejecting these companies permanently. It is simply insisting they prove their business models work before joining the most scrutinized index in the world.
Notable Quotes
Eventually these mega-IPOs will be added to the S&P 500, unless their business models fail, so it is a question of timing. Given the low floats and the huge amounts of money indexed to the S&P 500, I think it's good that they'll wait until the stocks have a more liquid market.— Jay Ritter, University of Florida emeritus professor and IPO Initiative director
From a corporate strategy standpoint, it's not irrational to choose to run at a loss. Large companies like Amazon and Uber didn't join the benchmark until years after going public.— Lawrence Creatura, fund manager at PRSPCTV Capital
The Hearth Conversation Another angle on the story
Why does it matter whether SpaceX gets into the S&P 500 now or in 2028? Isn't it just a list?
It's a list, but it's the list. Trillions of dollars are indexed to it. The moment SpaceX enters, passive funds automatically buy billions of dollars of stock. That's real money moving, real price pressure.
So S&P is protecting investors from what, exactly?
From the risk of buying into a company that's burning cash at scale. SpaceX will spend $105 billion more than it makes in 2029. That's not a bug—it's the business model. But S&P wants to see a year where the company actually makes money before declaring it safe for the index.
But Amazon and Uber didn't make money for years after going public, and they're in the index now.
Exactly. And they waited. The rule isn't saying these companies can't succeed. It's saying: prove it first, then join the club. The irony is that SpaceX might be better off spending aggressively now and joining later, rather than cutting spending to hit profitability targets.
What about the other indexes that already changed their rules?
Nasdaq and FTSE Russell decided the risk was worth the speed. They want these mega-IPOs in their indexes fast. S&P decided the integrity of the profitability requirement matters more than being first. It's a different philosophy.
Who wins this argument?
Time will tell. If SpaceX becomes the most valuable company in the world by 2028, S&P looks prudent. If it stumbles, S&P looks wise. Either way, the company gets in eventually—unless the business fails entirely.