SpaceX Surges Past Amazon in Valuation Amid Post-IPO Trading Frenzy

Elon Musk’s SpaceX has achieved a historic milestone, with its market valuation soaring past Amazon and briefly overtaking Microsoft following a massive post-IPO rally. Driven by intense investor enthusiasm and the commencement of options trading, the rocket and AI giant has solidified its position among the world's most valuable corporations.

A Trillion-Dollar Leap in Market Capitalisation

SpaceX shares witnessed a dramatic 14.3% surge on Tuesday, trading at approximately $220. This rally brings the company's share price to more than 62% above its initial IPO price of $135. As a result, SpaceX’s market capitalisation has climbed to roughly $2.85 trillion.

To put this scale into perspective, SpaceX has officially surpassed Amazon’s market value of $2.64 trillion and briefly edged past Microsoft’s $2.92 trillion valuation. The sheer volume of market activity was unprecedented, with over $23.1 billion worth of SpaceX shares changing hands by mid-morning Tuesday—a figure that exceeded the combined trading volumes of Nvidia, Microsoft, Tesla, and Apple.

Options Trading Ignites High Demand

The introduction of options trading on Tuesday acted as a massive catalyst for the stock. Within just the first 10 minutes of trading, approximately 115,000 options contracts were exchanged. Demand was heavily skewed toward bullish sentiment, with call options outnumbering put options by a ratio of 1.7-to-1.

This surge has made SpaceX the third most actively traded single-stock contract globally, trailing only Nvidia and Tesla. Analysts from SpotGamma noted that heavy call demand in a low-liquidity environment could force dealers to buy more SpaceX stock, potentially fueling further upward momentum.

Analysts Warn of Speculation and Volatility

Despite the meteoric rise, the market remains cautious regarding the company's fundamentals. SpaceX reported a revenue of $18.67 billion last year, but recorded a net loss of $4.94 billion following its merger with the AI firm xAI.

Market experts have raised red flags about the current valuation. Ipek Ozkardeskaya, a senior market analyst at Swissquote Bank, described the current valuation as "making absolutely no sense," suggesting that much of the current price action is driven by speculative momentum rather than underlying financials. The relatively small public float further increases the risk of extreme price volatility.

Upcoming Index Inclusions and Strategic Moves

Looking ahead, SpaceX is poised for further institutional inflows. The company is preparing for fast-track inclusion in the Nasdaq 100 index, alongside upcoming additions to the FTSE Russell and MSCI indices later this month. Brokerage Zephirin Group expects a combination of passive flows and limited float to drive upside during these index additions.

Additionally, SpaceX is aggressively expanding its ecosystem. The company recently announced plans to acquire software firm Anysphere in a deal valued at $60 billion. Following the exercise of the greenshoe option by underwriters, the total proceeds from the SpaceX IPO have now risen to $85.7 billion, up from the initial $75 billion.

Key Takeaways