SpaceX Surpasses Amazon and Briefly Tops Microsoft in Market Valuation
SpaceX made headlines on Tuesday as its market valuation soared past Amazon’s and briefly exceeded Microsoft’s, propelled by a surge in its newly listed options contracts and strong investor enthusiasm for Elon Musk’s expanding empire. The company’s shares jumped 11% to close at $213.16, giving it a market capitalization of approximately $2.8 trillion—nearly $1 trillion more than its value at the time of its record-breaking IPO just last week.
Options Trading Fuels Volatility
A key driver behind the dramatic price movement was the launch of options trading on SpaceX shares. Within the first hour alone, over 500,000 options contracts changed hands, surpassing one million by early afternoon, according to Trade Alert data. This frenzied activity amplified the stock’s volatility, with traders using options to bet on rapid price swings or hedge their positions.
Joe Saluzzi, co-head of equity trading at Themis Trading, likened the trading dynamics to those of meme stocks: “It’s a $2.5 trillion company, but the way it trades it definitely feels like one of those meme stocks.” He cautioned that such names can run quickly and require careful handling.
Brent Kochuba, founder of options analysis service SpotGamma, noted that high options volume often impacts the underlying stock as market makers buy and sell shares to hedge their exposure. “If you’re a market maker, you can’t hedge SpaceX with anything other than SpaceX,” he explained.
Retail Investors Rally Behind the Stock
Retail investors—who received about 20% of SpaceX’s IPO allotment—continued to pile into the stock, purchasing a net $43.2 million in shares as of 10:10 a.m. ET. This followed net purchases exceeding $200 million over the previous two sessions, according to Vanda Research.
Despite broader tech weakness—the semiconductor index fell 3% and the Nasdaq Composite dropped 0.5%—SpaceX bucked the trend. Trading volume was massive, with dollar turnover hitting $52 billion, the highest among major U.S.-listed companies.
Valuation Concerns Amid Stellar Rally
While the rally has been impressive, analysts warn of potential volatility due to SpaceX’s relatively small public float and lofty valuation. The company reported $18.67 billion in revenue last year but posted a net loss of $4.94 billion after merging with the loss-making AI startup xAI. Its price-to-sales ratio stands at over 150, far exceeding Nvidia’s 20—a benchmark among high-flying tech firms.
On Tuesday, SpaceX’s market cap surpassed Amazon’s $2.65 trillion and briefly eclipsed Microsoft’s $2.92 trillion. It now trails only Apple, Alphabet, and Nvidia, each valued above $4 trillion.
Index Inclusion Could Sustain Momentum
Analysts believe the upward momentum may continue as SpaceX is poised for inclusion in major indices. The stock is expected to join the Nasdaq 100 soon, making it a core holding for passive funds and ETFs tracking the index. Additionally, FTSE Russell and MSCI will add SpaceX to their benchmarks effective June 26 and 29, respectively.
Zephirin Group, which initiated coverage with a “buy” rating, stated: “While index inclusion alone is typically not enough to drive sustained repricing, we see the combination of passive flows, momentum, and limited float driving upside potential beyond historical index expansion moves.”
IPO Proceeds and Strategic Moves
SpaceX also announced that underwriters exercised the “greenshoe” option to purchase additional shares, boosting total IPO proceeds to $85.7 billion—up from the initial $75 billion raised last week. In a separate strategic move, the company revealed plans to acquire software firm Anysphere for $60 billion, signaling its intent to expand beyond aerospace into high-growth tech sectors.
As SpaceX cements its place among the world’s most valuable companies, market participants remain watchful of both its transformative potential and the risks inherent in its volatile trading pattern.
