BY COMFORT OGBONNA
Shares of Elon Musk’s SpaceX soared more than 14% on Tuesday, extending a remarkable rally that has transformed the newly public company into one of the world’s most valuable corporations just days after its blockbuster stock market debut.
The stock climbed to around $220 per share, putting it more than 62% above its initial public offering price of $135 and lifting the company’s market capitalization to approximately $2.85 trillion. The sharp rise made SpaceX one of the biggest gainers on the Nasdaq and helped drive broader market gains as investors rushed to gain exposure to the company’s ambitious vision spanning space exploration, artificial intelligence, satellite communications, and advanced technology development.
The rally pushed SpaceX’s valuation above that of Amazon, which is currently valued at roughly $2.64 trillion. At one point during trading, SpaceX also briefly surpassed Microsoft’s market capitalization, placing it among the five most valuable publicly traded companies in the world. Only a handful of technology giants remain ahead of it, each with market values exceeding $4 trillion.
Investor enthusiasm was further boosted by the launch of options trading for SpaceX shares, giving traders additional ways to speculate on the company’s future performance. The introduction of options contracts is expected to increase trading activity and could contribute to heightened volatility as institutional investors and retail traders position themselves around the stock.
According to market analysts, the first day of options trading may have amplified buying pressure. Standard monthly options contracts began trading with strike prices ranging from $25 to $380, creating opportunities for bullish and bearish investors alike. Analysts noted that strong demand for call options could force market makers to purchase additional shares to hedge their positions, potentially adding more upward momentum to the stock.
Market observers also pointed to the company’s relatively limited supply of publicly available shares as a factor behind the dramatic price swings. With only a portion of SpaceX shares available for trading following its IPO, even moderate buying activity can have an outsized impact on the stock price.
Some analysts, however, warned that investors should prepare for significant volatility in the weeks ahead. They argue that the company’s current valuation far exceeds what traditional financial metrics would justify, particularly given its recent financial results.
SpaceX reported revenue of $18.67 billion last year and a net loss of $4.94 billion following its merger with artificial intelligence company xAI. Those figures stand in contrast to many of Wall Street’s largest technology companies, which continue to generate substantial profits and strong cash flows.
Despite concerns about valuation, many investors remain focused on SpaceX’s long-term growth potential. The company is widely viewed as a leader in commercial spaceflight, satellite internet services through Starlink, reusable rocket technology, and artificial intelligence initiatives. Supporters believe these businesses could generate substantial future revenue streams and reshape multiple industries over the coming decade.
Another major catalyst supporting the stock is its expected inclusion in several key market indexes. SpaceX is set to receive fast-track entry into the Nasdaq-100, a move that would make it a major holding in exchange-traded funds and index funds that track the benchmark. Such inclusion often creates automatic buying demand as passive investment funds adjust their portfolios.
Additional support could come from major index providers FTSE Russell and MSCI, both of which are expected to add SpaceX to their indexes later this month. Analysts believe these additions could attract billions of dollars in passive investment flows, providing another source of demand for the stock.
Several brokerage firms have also expressed optimism about the company’s near-term prospects. Some analysts argue that the combination of momentum-driven investors, limited share availability, and large-scale index inclusion could continue pushing the stock higher despite concerns about valuation.
The company also announced that underwriters had exercised their “greenshoe” option to purchase additional shares following the IPO. The move increased total proceeds from the offering to $85.7 billion, up from the $75 billion initially raised, making it one of the largest public offerings in history.
Trading activity in SpaceX shares has been exceptionally strong. More than $23 billion worth of stock changed hands during the morning session alone, surpassing the combined trading volumes of several major technology giants, including Nvidia, Microsoft, Tesla, and Apple.
While many large technology stocks traded slightly lower during the session, SpaceX continued to attract investor attention as traders bet on the company’s ability to capitalize on its dominant position in the rapidly evolving space and AI sectors.
Adding to the excitement, SpaceX announced plans to acquire software company Anysphere in a deal valued at approximately $60 billion. The acquisition is expected to strengthen the company’s artificial intelligence capabilities and expand its presence in enterprise software, further reinforcing Musk’s vision of building an interconnected ecosystem of advanced technology businesses.
As investors continue to evaluate the company’s long-term prospects, SpaceX’s extraordinary market debut has already established it as one of the most closely watched stocks on Wall Street. Whether the rally can be sustained remains uncertain, but the company’s rapid ascent has underscored the immense appetite among investors for firms positioned at the intersection of space technology and artificial intelligence.
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