Space Exploration Technologies (SPCX +2.58%) officially joined the Nasdaq-100 on July 7. The megacap growth stock was fast-tracked into the index less than a month after its June 12 initial public offering.
However, the percentage of shares available for public trading -- known as the float -- is roughly 5% of SpaceX's market cap. That number will increase as shares are gradually unlocked beginning Aug. 6. Until then, SpaceX's Nasdaq-100 weighting is around four or five times its float rather than its market cap.
So instead of being over 4% of the Nasdaq-100 and Nasdaq-100-based exchange-traded funds (ETFs) like the Invesco QQQ Trust (QQQ -1.90%), SpaceX is 1.1% for the time being -- making it the 22nd largest holding in the ETF.
Image source: Getty Images.
Investment management firm Vanguard just updated its holdings across dozens of its ETFs. As of June 30, the data shows that multiple Vanguard ETFs bought SpaceX in June, including the Vanguard Total Stock Market ETF (VTI -1.12%), the Vanguard Growth ETF (VUG -2.22%), the Vanguard Mega Cap Growth ETF (MGK -2.42%), and the Vanguard Communication Services ETF (VOX -3.52%). But only one Vanguard ETF has a higher weighting in SpaceX than the Nasdaq-100.
SpaceX will anchor the Vanguard Communication Services ETF
Vanguard has low-cost ETFs for each of the 11 stock market sectors. In June, I correctly predicted that Vanguard would add SpaceX to its communication sector ETF rather than industrials or technology because most of SpaceX's revenue and near-term growth are driven by its Starlink network of low-earth orbit satellites and because SpaceX owns the social media platform X (formerly Twitter).
That prediction came true when Vanguard updated the holdings of its Communication Services ETF, and SpaceX already jumped to the 13th-largest holding at 2.4%. That's significantly higher than the less than 0.5% weighting in the three Vanguard ETFs mentioned earlier.
Investors can expect SpaceX's weighting in the communications sector to grow as more shares are unlocked and traded on the Nasdaq. When SpaceX is eventually weighted by market cap, it will likely rank as the third-largest holding behind Alphabet and Meta Platforms. But it could even be the second-largest holding if it overtakes Meta Platforms in market cap again.
NYSEMKT: VOX
Key Data Points
Sector ETF concentration is a bonus
With a mere 0.09% expense ratio, the Vanguard Communication Services ETF is one of the best ETFs to buy for investors looking for a low-cost option that will make SpaceX a top holding. Whereas funds based on the Nasdaq-100 include stocks from all sectors, sector-based ETFs give added weight to industry leaders because there are fewer components. This structure allows Amazon and Tesla to dominate the consumer discretionary sector, ExxonMobil and Chevron to lead the energy sector, and so on.
SpaceX's entry into the communications sector puts it in the big three alongside Alphabet and Meta Platforms. Once SpaceX's lockup period fully ends in early December, investors can expect close to 60% of the ETF to be invested in these three stocks.
