SpaceX’s stockmarket rally continued on Tuesday, with Elon Musk’s group overtaking Amazon in terms of market capitalization. With a share price of $209.30, up over 54% from its IPO price of $135, the company has reached a valuation of about $2,750bn. It has thus become the fifth most valuable company in the world, behind only Microsoft and the three giants whose market caps now exceed $4,000bn, i.e. Nvidia, Alphabet and Apple.This surge stands in stark contrast to the company’s recent financial performance. SpaceX generated $18.67bn in revenue last year but recorded a net loss of $4.94bn following its merger with xAI. Several analysts are warning that the current valuation is difficult to justify based on fundamentals, highlighting the speculative nature of the rally. The launch of the options market for SPCX stock, combined with a low public float, could further exacerbate the stock’s volatility.
Investors are also anticipating significant technical support from the upcoming inclusion of SpaceX in several major stock indices. Its entry into the Nasdaq 100, along with its forthcoming addition to the FTSE Russell and MSCI indices, is expected to trigger automatic buying from index funds. Meanwhile, the underwriting banks responsible for the IPO have exercised their over-allotment option, bringing the total amount raised to $85.7bn. However, the stock pared some of its gains following the announcement of the acquisition of Anysphere, the parent company of the AI-assisted coding tool Cursor, for $60bn.
