SpaceX’s explosive stock market debut has delivered windfall gains for early investors, but its impending inclusion in some of the world’s largest stock indexes is opening a new debate across Wall Street: whether passive investors are being forced to take on exposure to one of the market’s most volatile and controversial companies.

The Elon Musk-led company, which began trading last week in the largest initial public offering in history, has quickly become one of the world’s most valuable corporations. Following another strong session on Tuesday, SpaceX’s market capitalization climbed to roughly $2.7 trillion, making it the fifth-largest company globally and placing it ahead of many long-established corporate giants.

Its rapid ascent is now forcing major index providers and fund managers to determine how the stock will be integrated into benchmark portfolios that millions of investors own through retirement accounts, mutual funds, and exchange-traded funds.

For some market participants, that prospect is generating unease.

“In many ways, SpaceX is a lot like bitcoin: it has no earnings, no yield, is so far extremely volatile, and has about as many haters as it does hardcore believers,” observers have noted. The key distinction, they argue, is that investors can choose whether to own bitcoin, whereas many may soon gain exposure to SpaceX through index funds, whether they want it or not.

Passive Investors Face Unavoidable Exposure

Major index providers, including Nasdaq, CRSP, FTSE Russell, and MSCI, have already taken steps to accommodate SpaceX within their large-cap benchmarks. Because of the company’s enormous market value, its inclusion is expected to affect a wide range of passive investment products, including popular growth-focused exchange-traded funds.

Among the concerns is the potential impact on portfolio volatility. According to market data, SpaceX’s implied volatility stood near 120 on Tuesday, roughly three times higher than that of the iShares Bitcoin ETF. If it were already part of major benchmarks, it would rank among the most volatile stocks in both the Nasdaq 100 and the S&P 500. The company also stands out because it remains unprofitable despite its trillion-dollar valuation, an unusual characteristic among the largest publicly traded corporations.

For critics, this raises questions about whether index investors are being exposed to risks they never actively chose.

Ayman Saidi, partner at Strategic Investment Solutions, said Vanguard and other large money managers who are going along with Nasdaq’s mandate and rule change are betraying U.S. savers. VUG in my portfolio will likely own SpaceX soon.

“This is why I like Dimensional Funds: they do not simply copy an index. It will be a major market distortion.’”

Index funds have become the dominant force in global markets because they offer low costs and broad diversification. Yet many believe that when an index automatically absorbs a company of SpaceX’s size and volatility, investors lose the ability to make active judgments about valuation and risk.

Comparisons With Bitcoin And AI Speculation

SpaceX’s valuation and trading behavior have drawn comparisons not only with technology stocks but also with cryptocurrencies. Like bitcoin, supporters see the company as a transformative platform tied to powerful long-term trends including artificial intelligence, space infrastructure, satellite communications, and autonomous systems.

Skeptics, however, question whether the company’s valuation has run too far ahead of its underlying financial performance. The debate has intensified because SpaceX is no longer solely a rocket company.

Earlier this year, Musk combined SpaceX with artificial intelligence startup xAI, further increasing investor enthusiasm around AI-linked growth opportunities. That combination of space technology and AI has turned the company into one of the market’s most speculative and polarizing investments.

Kevin Kelly, co-founder of research firm Delphi Digital, argued that investor appetite for risk remains strong.

“At this point, if you’re allergic to volatility, you might just want to be in bonds,” Kelly said.

“AI has captivated a lot of the speculative audience and some of these AI stocks look like early token charts. Plus, SpaceX is so polarizing, there are people in the more traditional sell-side camp that couldn’t even get past this if it IPO’d at $600-or-700 billion.”

Following its IPO, SpaceX has become a symbol of the broader speculative enthusiasm surrounding artificial intelligence and next-generation technologies.

Why Index Inclusion May Eventually Reduce Volatility

Not everyone believes SpaceX’s extreme price swings will persist. Some investors argue that becoming part of major indexes could actually help stabilize the stock over time.

Index inclusion typically increases liquidity because large institutional investors, passive funds, and high-frequency trading firms continuously buy and sell shares as they rebalance portfolios. The result is often a deeper and more efficient market with less dramatic price movements.

Noel Smith, founder and chief investment officer of Convex Asset Management, believes that dynamic will eventually work in SpaceX’s favor.

“Going in the index will reduce SpaceX vol – no way it stays at 120,” Smith said.

“HFTs constantly rebalancing, passive flows that don’t sell, there’s way more liquidity.”

That view reflects a common pattern seen with other heavily traded securities. While initial excitement can generate extreme volatility, broader ownership and deeper trading activity often dampen fluctuations over time.

A New Test For Passive Investing

SpaceX’s inclusion in major indexes represents more than just another stock addition. It is emerging as a test of how modern passive investing handles companies whose market values soar despite limited earnings visibility and exceptionally high volatility.

The stock’s arrival also comes at a time when passive investment vehicles control a larger share of global assets than ever before. As a result, decisions made by index providers increasingly influence capital allocation across financial markets.

Supporters argue that index funds are simply reflecting market realities. If investors collectively assign SpaceX a multi-trillion-dollar valuation, then benchmarks should incorporate that judgment. Critics counter that such an approach can amplify speculative excesses by funneling even more capital into already richly valued companies.

For now, investor enthusiasm remains firmly in control. SpaceX has gained roughly 50% since its IPO pricing, and the company continues to benefit from optimism surrounding AI, satellite communications, defense technology, and commercial space exploration.

Whether that enthusiasm proves justified over the long run remains one of the most consequential questions facing markets in 2026. As index providers prepare to add SpaceX to benchmark portfolios, millions of investors may soon find themselves participating in that debate, whether they intended to or not.

Michael Burry, the investor made famous by his successful bet against the U.S. housing market before the 2008 financial crisis, has signaled that he is steering clear of one of the hottest trades on Wall Street: SpaceX.

The caution from the man known as the “Big Short” comes as Elon Musk’s aerospace and artificial intelligence conglomerate continues a stunning post-IPO rally that has captivated investors and pushed the company’s valuation into territory rarely seen in public markets.

SpaceX, which completed the largest initial public offering in history last week, has surged from its IPO price of $135 per share to more than $200 within days of trading, adding hundreds of billions of dollars in market value and cementing its status among the world’s most valuable publicly traded companies.

Yet Burry, who has built a reputation on identifying bubbles and excessive market optimism, says he is not prepared to either buy or short the stock.

In a post published Tuesday on his Substack page, Burry revealed that while he had examined several put-option strategies that would allow him to bet against SpaceX, he ultimately decided against taking a position.

“No thank you,” he wrote.

“I am not involved with SpaceX now. Neither short nor, ahem, long,” he added.

This forms part of a growing divide among investors over whether SpaceX’s extraordinary valuation can be justified by its underlying business performance or whether the stock is being propelled primarily by enthusiasm surrounding Musk himself.

The debate has intensified as SpaceX’s market capitalization has soared far beyond traditional valuation benchmarks. Before the IPO, Burry had already questioned the company’s worth, arguing that the information contained in its regulatory filing did not support a trillion-dollar valuation.

“Nothing in that S-1 suggests it is worth $1 trillion let alone $2 trillion,” he wrote.

Following the rally, his concerns have only deepened.

“At $2.8 trillion market cap, SpaceX, which is fundamentally a small space company, a niche telecom, a bedeviled social media company, and a Coreweave-light, has less than $20 billion in total revenue,” Burry wrote.

His criticism bolsters a broader concern among some analysts who argue that investors are assigning massive future growth expectations to businesses that have yet to generate profits on a scale that would traditionally support such valuations.

SpaceX currently spans several businesses. Beyond its rocket-launch operations, the company controls the Starlink satellite internet network, artificial intelligence assets acquired through xAI, the social media platform X, and a growing portfolio of AI infrastructure projects.

Investors backing the stock believe these businesses could evolve into dominant platforms across communications, artificial intelligence, cloud computing, and space infrastructure over the coming decade. Elon Musk has fueled those expectations. Earlier this week, he suggested SpaceX could potentially generate about $1 trillion in annual revenue by 2030, a target that would place it among the largest corporations in history.

That vision has helped attract both institutional and retail investors eager to gain exposure to Musk’s latest growth story.

The frenzy has been evident in derivatives markets as well. More than 1.6 million SpaceX options contracts changed hands on Tuesday, the first day options trading became available for the stock. Market observers said that volume shattered the previous record for a newly listed company, underscoring the extraordinary speculative interest surrounding the shares.

Burry used a series of comparisons to illustrate what he views as the disconnect between SpaceX’s valuation and economic reality. According to him, the company’s market value now exceeds the annual economic output of several major countries, including Russia, Canada, and Italy.

He also noted that SpaceX’s valuation could theoretically purchase many of the world’s largest aerospace, defense, and industrial companies while still leaving substantial capital remaining. Perhaps most striking was his comparison with Berkshire Hathaway, the conglomerate built over decades by legendary investors Warren Buffett and the late Charlie Munger.

“Berkshire Hathaway has been eclipsed 2 1/2 times over in just three days,” Burry wrote.

The comparison is notable because Berkshire has long been viewed as one of the most successful wealth-creation vehicles in modern financial history, built through decades of disciplined investing and acquisitions.

For supporters of SpaceX, however, traditional valuation frameworks may no longer be the primary consideration. Several market commentators have argued that investors are effectively buying exposure to Musk’s ability to create entirely new industries rather than valuing the company solely on current earnings or revenue. CNBC’s Jim Cramer recently described SpaceX as a stock that is effectively a bet on “Elon Musk’s brain,” suggesting investors are pricing in future opportunities that have yet to materialize.

The rapid rise of SpaceX is also being closely watched by other companies preparing to enter public markets, particularly in artificial intelligence.

The success of the IPO has strengthened expectations for upcoming listings from OpenAI and Anthropic, two companies at the center of the global AI race. Investment bankers and venture capital firms are now seeing SpaceX’s debut as a test of investor appetite for highly valued technology companies that prioritize growth and market dominance over near-term profitability.

If SpaceX continues to command a multi-trillion-dollar valuation despite ongoing losses and heavy capital spending, it could embolden investors to support similarly ambitious valuations for future AI listings. That possibility may ultimately prove as important as SpaceX’s own stock performance. A sustained rally would signal that public markets remain willing to finance large-scale AI and technology expansion plans, even when profitability remains years away.

For now, however, Burry is choosing caution.

The investor who built his reputation by identifying market excesses before others saw them is watching from the sidelines as SpaceX continues its remarkable ascent, unwilling to bet either for or against one of the most polarizing stocks in modern market history.

The United Arab Emirates is poised to become one of the most significant sources of new global oil supply growth after leaving the Organization of the Petroleum Exporting Countries (OPEC), with the International Energy Agency forecasting the country’s production will exceed 5 million barrels per day next year and continue climbing through 2027.

In a report released Wednesday, the International Energy Agency (IEA) said the UAE’s total oil output is expected to reach 5.2 million barrels per day in 2027, representing an increase of 730,000 barrels per day from the previous year. The projected growth positions the Gulf producer as a major contributor to non-OPEC+ supply expansion at a time when global energy markets are navigating geopolitical tensions, shifting trade flows, and evolving demand patterns.

The forecast follows the UAE’s decision earlier this year to leave OPEC, a move Abu Dhabi said would allow it to pursue an aggressive capacity expansion strategy without being constrained by production quotas imposed by the cartel.

The departure marked a significant shift in the country’s energy strategy. UAE officials argued that maximizing production capacity and extracting greater value from hydrocarbon resources required more flexibility than OPEC membership allowed.

The IEA said the UAE has spent the past decade steadily increasing its production capabilities. Crude oil capacity has risen from about 3.1 million barrels per day in 2016 to nearly 4.4 million barrels per day by 2026. The country has also developed roughly 1.1 million barrels per day of condensate and natural gas liquids capacity, underscoring a long-term commitment to expanding its role in global energy markets.

That strategy is based on the Abu Dhabi National Oil Company, which has embarked on one of the largest investment programs in the global oil industry. Last month, ADNOC announced plans to award 200 billion dirhams ($55 billion) worth of projects between 2026 and 2028 as part of a broader growth strategy. The company has also outlined capital investment plans totaling approximately $150 billion between 2026 and 2030.

The scale of those investments highlights Abu Dhabi’s determination to strengthen its position among the world’s leading energy producers even as many Western countries pursue decarbonization goals and renewable energy development.

The UAE’s ambitions may not stop at the IEA’s 5.2 million barrel-per-day forecast.

UAE Energy Minister Suhail al-Mazrouei previously told Reuters that the country could potentially raise production capacity to as much as 6 million barrels per day if market conditions warrant such an increase, though he emphasized that this is not currently an official production target.

The expansion comes against the backdrop of continuing geopolitical uncertainty in the Middle East, particularly following the conflict involving Iran and concerns about shipping disruptions in the Strait of Hormuz, one of the world’s most important oil transit routes.

According to the IEA, the UAE has managed to maintain resilient export flows during the conflict due to significant investments in infrastructure designed to reduce reliance on the narrow waterway. A key component of that strategy is the Habshan-Fujairah pipeline, which can transport up to 1.8 million barrels per day directly to the Gulf of Oman, bypassing the Strait of Hormuz. The country also benefits from approximately 42 million barrels of storage capacity at Fujairah, one of the world’s largest oil storage hubs.

These assets have helped sustain exports even as regional tensions have disrupted shipping patterns. The IEA reported that UAE oil exports rose by 260,000 barrels per day in May compared with the previous month, reaching 3.1 million barrels per day. Crude production increased to 2.8 million barrels per day.

Even so, production remains roughly 835,000 barrels per day below levels seen before the regional conflict, suggesting there is considerable room for further recovery and expansion.

The agency also noted a rise in so-called “dark” shipping activity in the region. According to the report, more tankers have been traveling along the Omani coastline with their transponders switched off, making vessel movements harder to track and increasing concerns about transparency in global oil transportation.

To further insulate exports from geopolitical risks, ADNOC is accelerating construction of a new west-to-east pipeline project that would substantially increase the country’s ability to export crude through Fujairah without passing through the Strait of Hormuz. The company said the project is already about 50% complete and is expected to be operational in 2027. Once finished, it will double Fujairah’s export capacity and strengthen the UAE’s position as a reliable supplier during periods of regional instability.

The UAE’s growing production capacity could have far-reaching implications for global oil markets. As one of the few major producers actively expanding output while many rivals focus on maintaining discipline or managing decline rates, the country is increasingly positioned to influence supply balances. Additional barrels from the UAE could help offset disruptions elsewhere, place downward pressure on prices during periods of weak demand, and increase competition among exporters seeking market share in Asia and Europe.

The IEA’s projections suggest that the UAE’s departure from OPEC may ultimately reshape its role in the global energy market, transforming it from a quota-constrained producer into one of the world’s fastest-growing oil suppliers over the coming decade.