SpaceX Will Be a Top 4 Stock Holding in This Low-Cost Vanguard ETF by July
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SpaceX Will Be a Top 4 Stock Holding in This Low-Cost Vanguard ETF by July
09 mins
The SpaceX initial public offering (IPO) could come as soon as June 12. With the company looking to raise $75 billion at around a $1.8 trillion valuation, SpaceX will be the largest IPO in history.
SpaceX will heavily disrupt markets through the capital it raises as well as at the index level through eventual inclusion in the S&P 500(SNPINDEX: ^GSPC) and Nasdaq-100, the latter of which consists of the 100 largest non-financial companies by market cap listed on the Nasdaq exchange.
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But even if SpaceX achieves a $1.8 trillion valuation, it wouldn’t crack the top three holdings in S&P 500 index funds or even growth-focused exchange-traded funds (ETFs) such as the Vanguard Growth ETF or Vanguard Meta Cap Growth ETF, as Nvidia, Alphabet, Apple, Microsoft, Amazon, and Broadcom are all worth more.
However, there is one low-cost Vanguard ETF where SpaceX could become a top-three holding.
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The case for communications
There are 11 stock market sectors under the Global Industry Classification Standard (GICS). It’s an imperfect system, as Nvidia, Apple, Microsoft, and Broadcom are in the technology sector, while Amazon and Tesla are in consumer discretionary, and Alphabet and Meta Platforms are in communications.
Even without Amazon, Tesla, Alphabet, and Meta, the tech sector still makes up a staggering 38.6% of the S&P 500. Anthropic, the maker of the Claude large language models, and OpenAI, the maker of ChatGPT, are both expected to go public later this year and will almost certainly get added to the tech sector, making it an even larger share of the index.
But SpaceX may be better suited for the communications sector. GICS methodology aims to align companies with their primary revenue streams. That’s why Amazon was added to the consumer discretionary sector back when Amazon Prime was more valuable than Amazon Web Services. SpaceX’s main revenue driver is Starlink, a network of low-Earth orbit broadband and mobile satellites. Starlink exited 2025 with 9,600 satellites and is adding hundreds more each quarter. Starlink has revolutionized communications by beaming high-speed internet from space to previously inaccessible remote locations. What’s more, SpaceX also owns X (formerly Twitter), which was in the communications sector when it was a public company.
SpaceX could soon dominate communication sector ETFs
At a $1.8 trillion market cap, SpaceX would be worth more than the $1.52 trillion at Meta, — which has a whopping 20.3% weighting in the Vanguard Communication Services ETF(NYSEMKT: VOX). However, SpaceX won’t become that large of a holding overnight.
The S&P 500 and Nasdaq-100 are updating their entry policies to reflect a new era of blockbuster IPOs. Fast-track inclusion should allow SpaceX to join both indexes within a few weeks of going public. However, its weighting will be based on a multiple of its float rather than its market cap — most likely between three and five times its initial $75 billion float — or between $225 billion and $375 billion.
Even at that lower weighting, SpaceX would still land ahead of Verizon Communications and just behind Netflix as the fourth-largest holding in the Vanguard Communication Services ETF — making up roughly 5% of the ETF. However, SpaceX has an accelerated lockup policy that allows insiders to sell shares much faster than the standard 180-day period. As SpaceX’s float grows, so too should its weighting in the communications sector, as well as the major indexes.
With a mere 0.09% expense ratio, the Vanguard Communications ETF stands out as the best low-cost fund for investors seeking greater exposure to SpaceX than an S&P 500 index fund offers.
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Daniel Foelber has positions in Netflix and Nvidia. The Motley Fool has positions in and recommends Alphabet, Amazon, Apple, Broadcom, Meta Platforms, Microsoft, Netflix, Nvidia, Tesla, and Vanguard Growth ETF. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
