Elon Musk's SpaceX to Join the Nasdaq 100 Index

Summary

Nicholas Owens of Morningstar explains his sell rating on SpaceX with a $62 price target, calling shares overvalued. He details how passive inflows from Nasdaq 100 inclusion will be offset by a stream of insider lockup expirations that flood supply. He also discusses the likelihood of a SpaceX-Tesla merger within a year and his skepticism about AI-driven valuation.

• SpaceX joins Nasdaq 100 today, expected to generate ~$8 billion in passive buying demand.
• Morningstar's Nicholas Owens rates SpaceX a sell with a $62 price target, calling shares overvalued.
• He sees AI and space infrastructure forecasts as highly speculative, with overinvestment risk in compute.
• Staggered lockup expirations begin after earnings; first unlock is 7.3% of float, larger than the IPO.
• Insider selling is likely to overwhelm passive buying, creating significant supply overhang.
• Owens believes a SpaceX-Tesla merger is likely within a year, potentially via SpaceX issuing equity to buy Tesla.
• His framework values SpaceX on a more 'down to earth' basis, discounting long-dated Mars ambitions.