However the market hasn't priced these new stocks at all, the existence of index trackers is being exploited to force prices on enough buyers to make the prices stick. This is the wrong way around. It's market manipulation. It's using the behaviour of index funds to influence prices, decoupling those prices to at least some extent from the discretion of market participants.
Let the market price the stock, then the index trackers can buy in, this is exactly why these rules exist, and why it's a travesty that the NASDAQ is waiving them.
I don't want my life savings tightly coupled to a young and hyped up technology which is currently being wielded in the most antisocial way possible.
Simple as.
A certain amount of required scrutiny and experience derisks that possibility. Also remember pre-IPO the valuation isn't set by the broader market, so you don't know if any of these valuations are even real. Do we want to set a precedent where banks can put any price tag they want on pig everyone is forced to buy?
Once these companies go through the same process Google or any other S&P member did, they're welcome to join the party.
1. Google has a history of profits. Their move into AI isn't coming at the expense of Search Ad revenue, and can be seen as defending it for the future. Their last annual report shows continued growth in this sector. So the P:E ratio isn't NaN.
2. Their stock prices has survived the test of market trading and multiple reporting windows, short sellers, WSB regressive behavior, etc. In part because they have a huge publicly tradeable float.
3. There isn't a huge bundle of shares in lockup until six months after the IPO that would put selling pressure on the symbol.
It's also a safer bet as a company, though that technically shouldn't be the criteria for indexing:
1. Google has a diverse product line: youtube subs, search ads, adwords, cloud services, etc. And a demonstrated ability to launch more (probably too many more).
2. They have a huge existing customer base to upsell to; cost of customer acquisition would be low for quite a while.
3. Anthropic and OpenAI are dependend on nvidia to supply them every beefier chips, while Google has their own TPUs to run on and lease out to others.