Al Root

EchoStar stock is in -- it joined the S&P 500 index before the market open on Monday.

Index inclusion can give any stock a boost, but that isn't the main reason for recent gains. EchoStar shares remain a good way to play SpaceX stock ahead of its epic initial public offering, expected later this year.

Echostar is a data conglomerate that operates a fleet of satellites capable of beaming television and data from space, and operates its Boost Mobile wireless network down on Earth.

Those are interesting businesses, but they're unlikely to be why S&P Global tapped Echostar for index inclusion. Instead, EchoStar is morphing into a wireless spectrum -- the range of frequencies over which wireless data travel -- and investment holding vehicle.

Its crown jewel is SpaceX stock, acquired by selling spectrum to Elon Musk's rocket company. Spectrum is a finite resource that every wireless or broadband data provider needs.

The SpaceX pivot is probably the biggest reason EchoStar is qualified for index inclusion. S&P Global didn't immediately respond to a request for comment about its inclusion criteria.

EchoStar got its first tranche of SpaceX stock after announcing a September deal to sell its AWS-4 and H-block spectrum licenses to SpaceX, acquiring $8.5 billion in stock in that transaction. It got another $2.6 billion worth by selling more spectrum in November, so EchoStar owns about $11.1 billion in SpaceX stock, acquired when the company was valued at $400 billion.

SpaceX is now worth about $27.5 billion based on its private-market valuation, and that could get another boost when SpaceX sells shares in an IPO.

The $16 billion jump in value closely mirrors gains in Echostar stock from September through early Monday trading.

SpaceX plans to raise tens of billions of dollars to accelerate its artificial-intelligence business. CEO Musk wants to put AI data centers in space, on the conviction that space-based AI computing could be cheaper than terrestrial AI computing in a couple of years. Terrestrial computing requires significant cooling, energy, and water, inefficiencies that some space designs can mitigate.

SpaceX isn't likely to go into the S&P 500 right after its IPO. Typically, companies must be profitable and public for a year before entering the index.

SpaceX is proving to be a special case, though, with a top-10 U.S. stock market valuation right out of the gate. Nasdaq might admit SpaceX into the Nasdaq 100 index early to lure SpaceX to its exchange. The NYSE owner, Intercontinental Exchange, doesn't have a similar index to lure SpaceX with.

Whether S&P Global would modify rules for SpaceX is hard to say. "S&P Dow Jones Indices does not comment on speculation regarding potential index or methodology changes," said the company in an emailed statement. "The S&P 500 is governed by an independent Index Committee pursuant to a transparent, published methodology that clearly describes the eligibility criteria. Any material changes to the index or its methodology involve a public consultation process announced through official S&P DJI channels."

Trillions of dollars are indexed or benchmarked to the S&P 500, which is why inclusion can be such a big deal. It opens up a huge addressable market for any company's shares.

SpaceX probably won't need any help attracting interest. That's good news for Echostar shareholders, who are along for the ride.

Echostar stock was up 1.2% in early trading on Monday, while the S&P 500 and Dow Jones Industrial Average were both up about 1.4%. Most shares were higher after President Donald Trump said the U.S. and Iran held talks aimed at ending fighting in the Middle East.

Write to Al Root at allen.root@dowjones.com

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March 23, 2026 12:29 ET (16:29 GMT)

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