You can ignore AI giants like SpaceX, but your 401(k) won’t

Gwynne Shotwell, President and COO of SpaceX, right, celebrates with colleagues during a bell ringing ceremony for the IPO of SpaceX at the Nasdaq MarketSite in New York, Friday, June 12, 2026, in New York. (AP Photo/Frank Franklin II)2026-06-13T12:01:41Z NEW YORK (AP) — While you might want to ignore all the hubbub around SpaceX, Elon Musk and IPOs, your 401(k) likely can’t.SpaceX is now worth $2.1 trillion after its stock launched 19.2% higher in its debut on Wall Street. Whether or not you believe it deserves to be worth more than Exxon Mobil, Bank of America and Coca-Cola combined, the collective market does. And if SpaceX maintains that big a value, it will join some high-profile stock indexes.Many of these indexes don’t care about how realistic a company’s growth plans are or who its CEO is. They’re simply trying to show how slices of the market, or the whole thing, are performing. And if SpaceX is big enough to meet the qualifications to join those indexes, whether it’s in a few weeks or a year, it will gain entry.That matters for investors and their 401(k) accounts because they’re depending more than ever on funds that simply mimic these indexes. It’s a lower-cost way to invest, allowing savers to keep more of their investments. Partly because of that, such index funds have usually proven to be better performers than funds that try to pick and choose individual stocks. Just one in five actively managed U.S. stock funds survived and beat their average index peer over the last decade, at 21%, according to Morningstar’s data through 2025. Such disparities in performance meant investors had more money invested in U.S. index funds than actively managed ones beginning in 2024, and the gap has only grown since then.Here’s a look at what’s going on: What indexes areThey’re things the investment industry has created to answer the question: What is the market doing? It’s otherwise tough to answer quickly when the U.S. market has thousands of stocks moving in different directions at any moment.The S&P 500 is perhaps the most famous and influential index. It tracks 500 of the biggest U.S. stocks, and trillions of dollars in investments are either directly mimicking it or at least benchmarking themselves against it.The Dow Jones Industrial Average is well known because it’s been around since the 19th century, but it tracks only 30 big stocks so Wall Street pays it little attention. Read More Companies want to be in indexesBecause index funds are the way so many investors put money into the stock market, companies want to be part of indexes. Stocks can see a big jump in their prices after S&P Dow Jones Indices, Nasdaq, FTSE Russell or other companies announce they’ll be joining their indexes.The investment industry has created funds, including both traditional mutual funds and exchange-traded funds, to track almost every kind of index. More than 1,000 index funds were available at the end of last year, according to the Investment Company Institute. Of them, 185 tracked the S&P 500. SpaceX could soon be in indexesNasdaq changed its rules to allow some huge companies to join its Nasdaq 100 index after just 15 trading days. That’s a break from the past, where it would wait until each December to add new members in an annual reconstitution to make sure it includes the 100 largest non-financial companies on the Nasdaq. Some popular funds track the Nasdaq 100 index, including the QQQ exchange-traded fund from Invesco that has roughly $477 billion in total investments. That means QQQ holders could soon own shares of SpaceX, without doing anything on their own. Sign up for Morning Wire: Our flagship newsletter breaks down the biggest headlines of the day. Email address Sign up By checking this box, you agree to AP's Terms of Use and acknowledge that AP may collect and use your data pursuant to our Privacy Policy. Other AI giants could as wellAnthropic and OpenAI are two other huge AI-related companies looking to sell their own stocks soon on a U.S. exchange for the first time. Their IPOs could potentially make each worth close to $1 trillion.It used to be that companies would have an IPO long before they got that big. But SpaceX, Anthropic and OpenAI swelled to tremendous sizes thanks to dollars from private investors, including pension funds, companies and rich investors, away from the public market. That’s forcing the reconsideration for the investment industry about how quickly to add companies to indexes that they say track the biggest companies. Not every index is making changes to fast-track big IPOs The company behind the S&P 500 is not making changes to allow SpaceX and other “mega” IPOs faster entry into the index. For it, a stock needs to trade on an eligible exchange for at least 12 months before it can join the index. Not only that, S&P Dow Jones Indices also requires companies to have made a profit in its most recent quarter and over the sum of its last four quarters. SpaceX lost $4.9 billi