SpaceX nears $2.7 trillion valuation as stock rally tops 50%

SpaceX is on course to overtake Amazon as the world's fifth-most valuable publicly traded company after another strong surge in its share price extended gains from its blockbuster stock market debut.

Shares in Elon Musk's aerospace company were indicated to open around 6% higher on Tuesday, building on nearly 20% gains recorded during each of its first two trading sessions. If those gains hold, SpaceX's market capitalisation would approach $2.7 trillion, less than a week after its historic initial public offering.

The company, which trades under the ticker SPCX, completed the largest IPO on record on Friday, raising $75 billion at an initial valuation of roughly $1.8 trillion, as per Business Insider.

SpaceX Adds Nearly $1 Trillion in Market Value

Investor demand has remained exceptionally strong since the company's market debut.

By Monday's close, SpaceX's valuation had climbed above $2.5 trillion, making it the sixth-largest company in the world by market capitalisation. The company's value now exceeds that of several technology and investment giants, including Meta, Broadcom and Berkshire Hathaway.

The valuation is also nearly $1 trillion higher than that of Musk's electric vehicle company Tesla.

Based on premarket trading around $204 per share, SpaceX would move ahead of Amazon, becoming the fifth-most valuable listed company globally.

Earlier in premarket trading, the stock had risen by as much as 11%.

Additional IPO Proceeds Boost Investor Confidence

The latest gains came after SpaceX disclosed that the banks underwriting its IPO had exercised a greenshoe option, increasing the amount raised from the offering.

The move added another $10 billion to the proceeds generated from the flotation, bringing total funds raised to approximately $85 billion.

The additional capital has further strengthened investor confidence in the company, which is widely viewed as a leader in commercial spaceflight, satellite communications and next-generation aerospace technology.

Analysts Divided Over SpaceX's Soaring Valuation

Despite the remarkable rally, market observers remain divided over whether SpaceX's valuation accurately reflects its long-term prospects.

Supporters point to Musk's track record, the company's dominance in rocket launches and satellite infrastructure, and its growing ambitions in artificial intelligence as reasons for optimism.

Others have expressed concern that investor enthusiasm may be running ahead of business fundamentals.

Some analysts have described SpaceX as the market's newest meme stock, arguing that momentum-driven buying has become a major factor behind the share price surge.

Ipek Ozkardeskaya, senior analyst at Swissquote, warned that speculative behaviour appears to be contributing to the rally.

She described the stock's rise as "probably speculative bubble" territory, noting that investors may be buying primarily because they expect other investors to continue pushing prices higher.

According to Ozkardeskaya, the risk is that sentiment could reverse if investors begin questioning whether the company's fundamentals support its rapidly expanding valuation.

Cursor Acquisition Expands AI Strategy

The latest surge in SpaceX shares also came on the same day the company announced plans to acquire AI coding startup Cursor in a deal valued at $60 billion.

Cursor has emerged as one of Silicon Valley's fastest-growing artificial intelligence companies, developing software tools that help programmers write and edit code more efficiently.

The acquisition is expected to strengthen SpaceX's AI capabilities and support the development of Grok, the company's artificial intelligence platform.

Cursor chief executive Michael Truell recently described the proposed merger to employees as "a big risk, or a big bet" for the company.

With its stock continuing to climb and major acquisitions already underway, SpaceX has quickly established itself as one of the most closely watched companies on Wall Street following its record-setting market debut.