SpaceX in the S&P 500 would push AI stocks to 51% of the index, strategist says

SpaceX (SPCX) just shook up the enormous wireless industry with its latest move on Starlink, but that won’t put it in the S&P 500 (^GSPC) quite yet.

S&P rules require a company to be publicly traded for at least 12 months before it can be added to the storied S&P 500. That means SpaceX won’t be eligible until June 2027 at the earliest.

But that isn’t stopping well-followed strategists from doing a little scenario planning.

Take veteran investing strategist Jim Bianco of Bianco Research, who boasts nearly 790,000 followers on X.

He calculated in a new X post that if SpaceX were currently in the S&P 500, AI-related stocks would be a massive 51% of the index’s weight. Should Anthropic (ANTH.PVT) and OpenAI (OPAI.PVT) go public before year-end — unlikely, at least for OpenAI — Bianco noted that AI stocks would comprise 55% of the S&P 500.

“The last time a single theme was >50% of the S&P 500 was the railroads in the 19th century,” Bianco noted.

While the pundits love comparing what we are witnessing with Big Tech stocks to the lead-up to the dot-com crash in the early 2000s, don’t overlook how this moment is also creeping up on the railroad bust in the late 1800s, as Bianco hinted.

Bofa strategists said this week that peak concentration for most asset bubbles in history has been capped at around 40% of all US sectors as a percentage of the US market cap, except during the railroad boom. Currently, 10 AI stocks — such as Nvidia (NVDA) — make up 42%. The railroad saw that figure hit 63%,

The railroad bust of 1873 was a massive financial collapse driven by speculation in railroad construction. This ultimately led to the Panic of 1873.

PBS noted that 89 of the country’s 364 railroads went bankrupt during the bust. A total of 18,000 businesses failed in only two years. By 1876, unemployment had risen to 14%.

Brian Sozzi is Yahoo Finance’s Executive Editor, host of the Sozzi Unleashed morning show and the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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