SpaceX, Concentration Risk, and the Equal-Weight Alternative.

SpaceX (Ticker: SPCX) began trading on June 12, 2026 at roughly a $1.8 trillion valuation.¹ Within weeks, it’s expected to join the Nasdaq-100 Total Return Index (XNDX) under Nasdaq's Fast Entry rule, automatically becoming part of any fund that tracks the cap-weighted benchmark.²

For investors in index funds and ETFs that track the Nasdaq-100, that addition has implications. SpaceX's initial index weight is modest because its public float* is limited.³ But as the lockup period expires through 2027, the float will rise, and SpaceX's weight could climb toward 4% to 5% of the Nasdaq-100. That would make it a top five holding in one of the most widely owned benchmarks in the world.² 

For long-term investors, the question becomes one of size: how much SpaceX is the right amount?

A Concentration Problem That Was Already Large

The Nasdaq-100 has grown increasingly top-heavy. As of mid-June 2026, its top 10 holdings represented roughly 46% of the index, with the top five alone accounting for about 30%.⁴ Adding SpaceX at a meaningful weight pushes that concentration higher and adds it to an already crowded list of mega-cap names that drive most of the index's movement.

That dynamic has worked well during stretches of mega-cap leadership. It works less well when those same names underperform. Until recently, several “Magnificent Seven” stocks were in the red for 2026 and underperforming the S&P 500 Index.⁵ Concentration cuts both ways.

SpaceX adds another wrinkle. It is unprofitable, recently public, and structured with concentrated voting control. The S-1 disclosed a 2025 net loss of $4.9 billion and 85.1% voting power held by one person, Elon Musk.⁶ A position of that size in the Nasdaq-100 is a meaningful single-name exposure for an investor who chose the fund for broad innovation access.

How QQQE Addresses It

The Direxion NASDAQ-100 Equal Weighted Index ETF (Ticker: QQQE) holds all the companies in the benchmark. The difference is how it weights them. Each constituent is set to about 1% of the fund at each quarterly rebalance, regardless of market capitalization.⁷

For investors who want SpaceX exposure but not a top five position in it, that distinction matters. In QQQE, SpaceX sits at the same weight as Costco (Ticker: COST), Linde (Ticker: LIN), Cisco (Ticker: CSCO), or Palantir (Ticker: PLTR).^# The investor gets exposure to one of the largest IPOs on record, but the portfolio does not get reshaped by it.

The methodology for the Nasdaq-100 Equal Weighted Total Return Index (NETR), which QQQE tracks, applies the same logic across the index. The quarterly rebalance trims names that have outperformed and adds to those that have lagged, mechanically restoring equal weights.⁷ For a newly public stock that could be volatile in its first year as a public company, that built-in discipline may help limit single-name drift.

The Broader Diversification Story

Equal weighting also surfaces the companies that get crowded out of a cap-weighted approach. Names that carry meaningful weight in QQQE often hold less than 1% in the Nasdaq-100. That spreads exposure across more of the innovation economy rather than concentrating it in the largest seven or eight names.⁸

The Nasdaq-100 Equal Weighted Index has been built around that principle. It provides exposure to innovation-driven companies with less dominance from mega-cap stocks and sectors like technology.⁹

Where QQQE Fits

Investors can use QQQE as an alternative to the cap-weighted Nasdaq-100 if they want equal-weight exposure as their core position, or as a complement that balances out the mega-cap concentration in a portfolio that already includes cap-weighted funds. Either approach allows for SpaceX participation without giving it the outsized weight it will eventually carry in the Nasdaq-100.

SpaceX's weight in the Nasdaq-100 will rise as its lockup period unwinds if the share prices holds. That’s simple math, and it is happening on a known timeline. Some investors will welcome that exposure at full weight. Others will want SpaceX in the portfolio without letting it become a top five holding. QQQE was built for the second group.