The AI super bull market enters the "SpaceX moment"! Passive funds are like rocket fuel, accumulating energy to ignite. The AI computing power frenzy is far from over.

Recently, many financial market experts and market observers have written articles expressing that index-tracking funds (i.e. index ETFs) are poised to create billions of dollars in new demand for SpaceX stocks. This prospect may lead to a feedback loop, further driving up the stock price and overall market value of this American supergiant focused on "space exploration + AI" founded by Elon Musk. The process of investing and building AI computing infrastructure with an expected scale of up to $3 trillion is progressing rapidly. Coupled with the prospect of billions of dollars in demand for SpaceX stocks from index-tracking funds, some analysts who are bullish on the future market believe that the "AI super bull market" sweeping through global stock markets is far from over. In the near future, after 15 days of trading on the public market, about 30% of SpaceX's freely tradable shares will be held by passive investors focused on index ETFs. This could provide continued momentum for the stock price to rise. SpaceX's record-breaking IPO size is not just a single financing event but more like a stress test for the global funding capacity under the backdrop of the "AI super bull market." Some analysts believe that SpaceX could be a strong amplifier for the AI super bull market rather than a bubble terminator. According to media reports on Tuesday, SpaceX has attracted over $250 billion in investor demand, surpassing the planned $75 billion target and potentially becoming the largest IPO in history. If SpaceX's stock price continues to rise due to index funds and scarcity of floating shares, it may attract more funds, further strengthening valuation expansion. Therefore, some Wall Street analysts who are optimistic about the AI computing craze dominating the global market believe that the trajectory of the AI super bull market is far from over, and SpaceX is more of a beneficiary and amplifier of the AI super bull market than a market panic-inducing "water-drainer." The $250 billion subscription scale itself indicates that global venture capital interest in AI computing infrastructure, commercial space exploration, and next-generation AI-focused space assets remains strong. If the market is truly on the brink of a liquidity crisis, such a nearly fourfold oversubscription would be difficult to achieve. This implies that long-term funds, sovereign funds, pensions, growth funds, and active hedge funds are actively seeking core assets capable of supporting future growth narratives. From the latest mainstream views on Wall Street, despite the recent sharp correction in stock prices of AI computing industry leaders such as ARM, Micron, SK Hynix, and Samsung, there is currently no pessimistic consensus that the "AI super bull market" is ending. On the contrary, there is an opposite trend: more large investment institutions are raising benchmark stock index targets, and the reasons for these upgrades are almost always related to the AI capital expenditure boom, the hot AI infrastructure construction process, and the profit expansion driven by AI. Goldman Sachs, a major investment bank on Wall Street, has repeatedly raised its target for the S&P 500 Index, suggesting that the index could surpass 9,000 points within the next year. This seemingly unreachable epic milestone implies that the benchmark stock index, which has surged over 60% since 2024, could rise another 20%. Goldman Sachs explicitly points out that AI-related infrastructure investments are supporting corporate earnings and asset performance while emphasizing that the real risks lie in uncontrollable inflation and rising financing costs, rather than a decline in AI demand or a pessimistic narrative of "AI bubble burst." Citigroup, on the other hand, has raised its year-end target for the S&P 500 Index from 7,700 points to 8,100 points, becoming one of the highest targets among mainstream institutions on Wall Street. When index funds meet SpaceX: Passive investment is changing the price discovery mechanism After two major index providers modified their rules to allow SpaceX to be included in benchmark indices, including Nasdaq Inc., FTSE Russell, and MSCI Inc., are preparing to swiftly include the company in their benchmark index systems. According to statistical data from index rebalancing forecasting service Intropic, about 30% of SpaceX's freely floating shares will be held by passive investors just 15 days after trading. In comparison, under the slower index inclusion rules of these index providers, this percentage was only about 4%. The strong expectations for this mechanical demand alone are enough to have a major upward drive on SpaceX's stock price and even lead to competition among investment funds before acquiring stocks. Combined with the market's bullish beliefs around Musk himself and the market frenzy around SpaceX and artificial intelligence, the risk lies in the fact that index products themselves may push the stock price higher, resulting in continually rising costs that these products will eventually have to pay. This has made the IPO of this rocket manufacturer and AI leader not only the largest IPO in history but also an important "rational test" of the passive investment funds' market influence. "Every index provider is trying to include SpaceX in their benchmark index so quickly, and one reason for this is the implicit competition between benchmark indices," said Marco Sammon, assistant professor at Harvard Business School and a long-time researcher of passive investment influence. "This seems like an index creation method rather than fundamental factors, but it could have a huge impact on prices." According to research firm Bloomberg Intelligence, passive investment tools account for about 60% of assets in US equity funds and control about one-fifth of the market value of the S&P 500 Index. Therefore, financial market experts have long been concerned that index investing may distort trading behavior and market price formation mechanisms. Sammon previously demonstrated that the price pressure from including stocks in indices is actually suppressed due to wide expectations of index inclusion events. His research report shows that the core reason behind this is that hedge funds and professional traders in market makers often gradually buy stocks in advance to position themselves before the index funds buy them. In a collaborative research paper with John Shim and Stefano Pegoraro, they found that these intermediary institutions establish positions before index funds truly need the stocks, and then sell their holdings when the index funds buy in. "But an important issue here is that when new stocks are rapidly included in an index, the time for arbitragers to build inventory positions will be significantly shortened," Sammon explained. In another study, he and his Harvard colleague Chris Murray researched CRSP, an index provider that has a mechanism for fast inclusion of IPOs. They found that companies that are included in the index early outperform the market by an average of 5% in the period leading up to the inclusion date, and this effect significantly reverses within three weeks. They also found that companies included rapidly in the index can raise more funds in the IPO market indicating that rigid passive investment demand indeed has real economic expansion consequences. This effectively amounts to a "shadow tax" imposed on passive investors: they have to mechanically buy at high prices; however, the companies themselves cannot sell their stock assets directly to the index-tracking funds. "When the inclusion window is compressed, the same scale of mechanical demand is more likely to have a greater short-term price impact, followed by a reversal," Sammon stated. "This situation can be further exacerbated by the high volatility and limited liquidity in the post-IPO market. In such an environment, the costs borne by index funds' investors will be higher." For index providers, whether to include a company quickly essentially boils down to choosing between two risks: hurriedly including an overhyped new stock subject or missing out on the massive inflow of funds brought by an industry giant's IPO. Aside from SpaceX, the two global AI application leaders OpenAI and Anthropic are also expected to undergo large-scale IPOs in the near future. S&P Dow Jones Indices has rejected a proposal to allow these three companies to be included rapidly and ahead of schedule in US benchmark indices, while other index providers have generally relaxed their index inclusion rules to include these massive IPO technology companies sooner. "Enterprises are now choosing to go public at a more mature stage of development, and rapid inclusion of IPOs helps indices better represent those listed companies that are truly important for economic growth prospects," wrote economists Phil Mackintosh and Nicole Torskiy from Nasdaq in a blog post last week. Based on their research data from 2010 to 2025, stocks that are included early in the Russell 1000 Index tend to outperform the S&P 1500 Index. Despite this, Intropic suggests that passive demand for SpaceX shares could still form a "reflexive loop." In a blog post released on Monday, the organization pointed out that the size of the funds generated by each index will depend on the company's market value on each index ranking date. And this market value itself may be temporarily inflated due to arbitrageurs preparing for mechanical buying pressure upon inclusion. If IPO investors themselves are subscribing to stocks based on expectations of future passive fund demand, this cycle could even extend to the IPO pricing stage, according to Intropic. "The price impact from passive fund flows is usually short-lived, but it can disrupt price discovery mechanisms at the most critical moments in a company's stock market journey," the London-based financial institution wrote. SpaceX is not the terminator but an amplifier of the AI computing craze! The AI super bull market may just be entering the second half Some investors may be concerned about the "giant IPO water-draining effect," but its impact leans more towards the short-term market structure rather than long-term bullish market logic. The latest research report from Goldman Sachs shows that even if the total US equity issuance reaches about $600 billion by 2026, it amounts to less than 1% of the total market value of the US stock market, theoretically absorbable, albeit with a temporary squeezing of small IPOs and some crowded positions. Goldman Sachs indicates that even if the IPO financing forecast for 2026 is raised to $225 billion and includes additional offerings, convertible bonds, SPACs, and the like to form a larger equity supply, it would still not exceed historical norms when compared to the total US stock market value. More importantly, share buybacks by US companies remain the strongest demand side of the market, and Goldman Sachs expects the S&P 500 Index to be supported by earnings growth. SpaceX is accelerating its transformation from a "commercial aerospace and space exploration company" to an operator of "global AI computing infrastructure + AI application behemoth." The unexpected $250 billion subscription scale is more than enough to show that the market is accepting this growth narrative and will continue to strengthen the trend and trajectory of "SpaceX's record-breaking IPO is actually expanding the boundaries of the AI super bull market rather than depleting the market liquidity." While industry leaders in the AI computing chain, including ARM, Micron, SK Hynix, Samsung Electronics, and others, have recently experienced significant price corrections, this is more of a revaluation of expectations rather than a reversal of industry logic. Over the past year, some parts of the AI industry chain have surged too quickly, and the market is moving from "infinite optimistic expectations" back to "realized order fulfillment pace." Historically, whether in the cloud computing supercycle, smartphone cycle, or IT internet cycle, the leading industry trends have often been accompanied by 20%-40% staged corrections. As long as the global AI data center construction process continues to drive massive expansion and growth in the full-stack AI computing infrastructure layer, such adjustments are more about turnover and valuation digestion in the AI bull market rather than the starting point of a bear market. In the eyes of some analysts, the real trigger for the "AI bubble" to completely burst and for global stock markets to enter a bear market is not the unprecedented IPO listing of SpaceX itself but the extremely high valuation IPO of SpaceX combined with record increases in 10-year and longer-term US Treasury yields, significant slowdowns in corporate earnings, slower AI capital expenditures, widespread investor doubts about AI revenue returns, mechanical rebalancing of passive funds, and redemption pressures from active funds all occurring simultaneously. In terms of global capital flows, it currently appears that the AI super bull market is entering its second stage. The first stage was dominated by large-scale training clusters driven by AI GPUs and ASICs; the second stage is beginning to spread to the power chain of data centers, HBM/DRAM/NAND, advanced packaging, liquid cooling, data center CPUs, optical communication/optical interconnects, high-performance Ethernet network infrastructure/data center DCI high-speed interconnections, as well as AI applications in PCs, wearable consumer electronics, humanoid Siasun Robot & Automation, autonomous driving, and SpaceX's space AI computing infrastructure representing the "new AI center." Major Wall Street financial giant Goldman Sachs has raised its target for the Kospi benchmark index in South Korea multiple times, betting that the South Korean stock market, which has surged 100% and experienced significant volatility since the beginning of the year, still has room for further growth. Goldman Sachs' target for the Kospi benchmark index has been raised from 8,000 to 9,000 and now up to 12,000 points (while the index was trading around 7,900 on Wednesday), with the core logic being not macro stimulus or monetary policy factors but the long-term storage boom cycle and the explosive demand for AI memory/storage chips, with SK Hynix, Samsung Electronics, and other Korean leaders being among the most significant beneficiaries of the global AI computing chain. The latest research report from J.P. Morgan, another major Wall Street banking giant, shows that under the frenzy of the tech stock bull market dominated by the AI computing theme, the institution predicts that one of the US benchmark indices, the S&P 500 Index, could surpass the seemingly unattainable epic milestone of 9,000 points in the next year, indicating that the benchmark stock index, which has surged over 60% since 2024, still has the potential to rise by over 20%. According to analysts at Bank of America, another Wall Street financial giant, AI computing infrastructure is entering a more sustained and broader capital spending cycle. Nearly simultaneously, a research report from Morgan Stanley suggests that the AI computing arms race is entering a stage of systemic expansion, with AI infrastructure demand showing a rare "inelastic" trend meaning that no matter how the cost curve changes, tech giants continue to invest in AI data centers, and this "inelastic demand" will continue to strengthen the resilience of the US economy, overall profit growth for the S&P 500 Index, and it predicts that by 2028, close to $3 trillion in AI-related infrastructure investments will flow through the global economy, with over 80% of the spending still ahead. At the shareholders meeting last week, TSMC chairman Wei Zheji said that demand will exceed supply for the next several years, and even with additional production capacity coming online in the US, TSMC will struggle to meet the needs driven by AI. In terms of specific AI capital expenditure prospects, Wei Zheji's statements at the shareholders' meeting, stating, "I don't know where the peak is" and "I haven't seen any signs of demand stopping," can be seen as the most bullish statement from an industry leader in the AI computing chain. In conclusion, Wall Street financial giants are optimistic about the trend of the AI super bull market and believe that the trajectory of SpaceX's IPO and the broader AI computing industry indicate that the AI super bull market is far from over.