Uploaded June 2026 | Updated September 2026, 1 week ago
As debate has raged about whether SpaceX is worth $ 2 trillion plus, and how much Anthropic and OpenAI will be priced at, there is a parallel question that has created just as much heat on whether these stocks should be included in the S&P 500. There are many who seem to be arguing against inclusion, with three different groups (and agendas) at play - active investing professionals who arguing that inclusion will make the S&P 500 an (even more) flawed investment vehicle for passive investors, academics and experts suggesting that inclusion would expose small investors and retirees to risks that they should not be taking (of over priced and money losing companies) and politicians who feel that inclusion will enrich the billionaire founders of these companies. In truth, the index inclusion effect has weakened over time, even as passive investing has surged, and the notion that small investors are uninformed and need protection from their mistakes is condescending and wrong. There is little benefit that these companies (SpaceX, OpenAI and Anthropic) will gain from being included in the index, and that the S&P 500 needs these companies in the index to preserve its standing as an index that tracks large cap US equities.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Indexology.pdf
Blog Post: aswathdamodaran.blogspot.com/2026/06/indexology-index-mechanics-and.html
As debate has raged about whether SpaceX is worth $ 2 trillion plus, and how much Anthropic and OpenAI will be priced at, there is a parallel question that has created just as much heat on whether these stocks should be included in the S&P 500. There are many who seem to be arguing against inclusion, with three different groups (and agendas) at play - active investing professionals who arguing that inclusion will make the S&P 500 an (even more) flawed investment vehicle for passive investors, academics and experts suggesting that inclusion would expose small investors and retirees to risks that they should not be taking (of over priced and money losing companies) and politicians who feel that inclusion will enrich the billionaire founders of these companies. In truth, the index inclusion effect has weakened over time, even as passive investing has surged, and the notion that small investors are uninformed and need protection from their mistakes is condescending and wrong. There is little benefit that these companies (SpaceX, OpenAI and Anthropic) will gain from being included in the index, and that the S&P 500 needs these companies in the index to preserve its standing as an index that tracks large cap US equities.
Slides: https://pages.stern.nyu.edu/~adamodar/pdfiles/blog/Indexology.pdf
Blog Post: aswathdamodaran.blogspot.com/2026/06/indexology-index-mechanics-and.html
