Just days after making history with the largest IPO ever, SpaceX has achieved another milestone, overtaking corporate giants Amazon and Microsoft to become the world’s fifth-most valuable publicly traded company.
SpaceX shares have climbed more than 50% from their IPO price, briefly touching an after-hours high of $229.85. At that level, SpaceX’s market capitalisation crossed the $3 trillion mark, surpassing both Amazon and Microsoft. The surge pushed SpaceX’s market value above Amazon, which stands at about $2.64 trillion. For a brief period, it also overtook Microsoft, valued at roughly $2.92 trillion, before its market value slipped slightly later in the day.
The rally has been nothing short of extraordinary. Investors have poured money into the stock since its market debut last week, adding nearly $1 trillion to the company’s value in a matter of days. The surge has turned SpaceX into Wall Street’s hottest trade and reignited a debate over whether the company’s sky-high valuation can be justified by its current business performance.
A blockbuster debut followed by a stunning rally
SpaceX raised $75 billion in its initial public offering last Friday, entering public markets with a valuation of roughly $1.8 trillion. At the time, that was enough to make the company the world’s eighth-largest listed firm. But investors were far from finished buying.
As of 11:13 a.m. EST, Amazon shares were trading at $249.38, up 1.33% or $3.28 for the day. SpaceX, meanwhile, was at $209.91, gaining 9.05% or $17.41.
Although the stock later pulled back, it remained one of the strongest performers on the market. Trading around $209 per share, SpaceX was valued at approximately $2.75 trillion, making it the fifth-largest publicly traded company in the world. Only Nvidia, Apple, Alphabet and Microsoft now stand ahead of it.
Can SpaceX challenge the world’s most valuable companies?
The speed of the rally has naturally raised a bigger question, how much higher can SpaceX go? Nvidia currently holds the title of the world’s most valuable company with a market capitalisation of around $5.14 trillion. SpaceX still has a considerable gap to close, its rally has prompted investors to speculate about whether it could eventually join the very top tier of global corporations.
Why are investors so excited?
Part of the enthusiasm comes from SpaceX’s unique position across several massive industries. Over the past two decades, the company has evolved from a bold rocket startup into a technology powerhouse with businesses spanning commercial space launches, satellite internet, telecommunications, defense, aerospace and artificial intelligence.
Through Starlink, it operates the world’s largest satellite internet network. It also dominates the global commercial launch market and continues to pursue ambitious long-term goals, including deep-space exploration. For many investors, that combination creates a rare growth story with opportunities across multiple trillion-dollar markets.
The company’s close ties to Elon Musk have also fueled investor optimism, with supporters betting that SpaceX can replicate the success seen in some of Musk’s other ventures.
The financial reality behind the excitement
Not everyone is convinced the company’s valuation makes sense. SpaceX reported revenue of $18.67 billion last year but posted a net loss of $4.94 billion following its merger with xAI. Those figures stand in sharp contrast to many of the technology giants it is now being compared with, several of which generate tens of billions of dollars in annual profits. That disconnect has led some analysts to warn that investors may be getting carried away.
“We can say with certainty that this valuation makes absolutely no sense today. People are buying SpaceX in the expectation that others will buy too and push the price higher – that’s speculation,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank told Reuters.
New catalysts could keep the momentum going
Even so, several developments could continue supporting demand for SpaceX shares. One of the biggest is the company’s expected inclusion in major stock market indices. SpaceX is set to join the Nasdaq 100 and will also be added to FTSE Russell and MSCI indexes later this month. These additions could lead to significant buying from passive investment funds and exchange-traded funds that track those benchmarks.
“While index inclusion alone is typically insufficient to drive sustained repricing, we see the combination of passive flows, momentum, and limited float driving upside beyond historical index-addition moves,” brokerage Zephirin Group said while initiating coverage of the stock with a “buy” rating. SpaceX also announced that its underwriters had exercised the IPO’s over-allotment, or “greenshoe,” option, increasing total proceeds from the offering to $85.7 billion.
Options trading adds another layer of risk
Investors are also closely watching the launch of options trading for SpaceX shares. Analysts say the stock’s relatively small public float could make it particularly vulnerable to sharp price swings as options activity increases.
“Today the SPCX options launch, offering standard monthly expiration and strikes ranging from $25 to $380. If call demand is heavy, dealers might be forced to buy SPCX into this low-liquidity situation,” said Brent Kochuba, founder of options analytics platform SpotGamma told NBC.
Many portfolio managers expect volatility to remain high, especially during the company’s early months as a public stock.
Retail investors are leading the charge
Another notable feature of the rally is the role being played by retail investors. Individual traders have poured into SpaceX shares at a pace rarely seen in recent years, helping drive the stock’s remarkable rise.
The buying frenzy has been so intense that some market researchers say SpaceX has become the single most popular stock among retail investors.
“There is only one stock retail [investors] care about right now,” researchers at Vanda wrote in a note to clients. “On a net basis, retail investors have now bought almost as much SPCX over the last two sessions as they bought across the entire US stock market last week,” they added.
A great company but is the stock too expensive?
Few would dispute that SpaceX is one of the most innovative companies in the world. It dominates commercial launches, runs a huge expanding satellite internet business and continues to push the boundaries of space technology. Its long-term growth prospects remain enormous. However, history shows that even exceptional companies can become risky investments when expectations run too far ahead of reality. Mega-IPO stocks often experience a period of euphoria after listing, only to face tougher scrutiny once the initial excitement fades.
Disclaimer: This article provides factual analysis only and is not, and should not be construed as, an offer, solicitation, or recommendation to buy or sell securities. Investors must conduct their own independent due diligence and seek advice from a registered financial advisor in the respective jurisdiction.