Evercore ISI’s Julian Emanuel has outlined a scenario where the S&P 500 could reach 9,000, suggesting that the catalyst would not simply be another Federal Reserve pivot or strong earnings but rather the public offering of Elon Musk’s SpaceX. This prospect has a 30% probability, fueled by AI-driven market growth that the IPO would likely accelerate.
While the firm's base case predicts a more conservative year-end target of 7,750 for the S&P 500 by 2026, optimism remains due to the immense scale of SpaceX’s IPO. Projected to price its shares at $135 on June 12, 2026, this offering is anticipated to raise $75 billion, positioning SpaceX with a market capitalization around $1.77 trillion following the IPO. According to projections, both Evercore and Goldman Sachs foresee SpaceX potentially generating over $1 trillion in revenue by 2031, primarily driven by advancements in artificial intelligence, with capital expenditures expected to exceed $360 billion by 2030.
Regarding S&P 500 inclusion, it is crucial to note that even with the monumental IPO, SpaceX will not immediately qualify for the index. S&P Dow Jones Indices requires companies to report positive net income, and SpaceX is not projected to reach profitability until 2027. This delay means that investors may experience a year of uncertainty post-IPO before any S&P 500 expectations can be entertained.
Emanuel’s prediction regarding the S&P 500 reaching 9,000 emphasizes the importance of investor sentiment. A $75 billion IPO would reinforce the narrative of AI growth, resulting in increased capital inflows into related sectors.
However, it is essential for investors to weigh the 30% likelihood of the 9,000 outcome against the 70% chance it may not materialize. With the base case of 7,750 reflecting strong upward potential from current levels, investors must remain mindful of SpaceX’s early years as a public entity, where growth expectations may drive stock performance prior to profitability. The gap between the two outcomes presents a notable 16% difference, urging a careful evaluation of potential investment strategies.