SpaceX valuation briefly hits $2.9T, surpassing Amazon in wild trading debut

SpaceX briefly became the fifth-most valuable company in the world on Tuesday, surpassing Amazon before its shares pared gains later in the session. The newly public company’s stock, which had already surged 20% on its first full day of trading Monday, spiked further after news of its acquisition of AI coding company Cursor and the launch of options trading. At its peak, SpaceX’s valuation touched $2.9 trillion, briefly eclipsing Amazon’s market cap and coming within striking distance of Microsoft.

Volatility expected from limited float

The dramatic price swings were largely anticipated. SpaceX made only about 4% of its total shares available for trading during its historic IPO, which valued the company at roughly $1.7 trillion and raised nearly $86 billion in fresh capital. With a limited float, even moderate trading volume can produce outsized moves. On Tuesday, traders exchanged more than 300 million SpaceX shares — over half of the 555 million shares available on the public market, according to Nasdaq data. The volatility continued into after-hours trading, with SpaceX’s valuation briefly passing Amazon’s market cap for a second time before retreating.

AI ambitions driving the narrative

The rally is being fueled by investor enthusiasm for SpaceX’s pivot toward artificial intelligence. The company announced it is acquiring AI coding startup Cursor for $60 billion in stock, a deal expected to close in the third quarter. SpaceX has also secured non-binding compute leasing agreements with Anthropic and Google, adding potential new revenue streams to its core space operations. These deals are central to Elon Musk’s broader vision of transforming SpaceX into an AI powerhouse — a claim that has drawn skepticism given the company’s recent financial performance.

Fundamentals versus market sentiment

Despite the trillion-dollar valuation, SpaceX posted a $4.9 billion loss on $18.7 billion in revenue last year. By comparison, Amazon generated $78 billion in profit on $717 billion in sales in 2025. The stark contrast highlights the extent to which SpaceX’s market cap is being driven by future promises rather than current earnings. Investors appear willing to look past the losses, betting that AI-related revenue will eventually materialize at scale. Musk himself acknowledged earlier this year that his AI company, xAI — now folded into SpaceX — “was not built right the first time around” and that he was rebuilding it “from the foundations up.”

What this means for investors and the market

SpaceX’s post-IPO trajectory offers a case study in how limited float, narrative-driven investing, and AI hype can combine to produce extreme valuations. For retail investors, the volatility poses significant risk: a stock that can gain $1 trillion in a matter of days can also lose it just as quickly. For the broader market, SpaceX’s performance signals that investor appetite for AI-adjacent stories remains strong, even when underlying fundamentals are weak. The coming quarters will be critical as the company integrates Cursor and begins reporting as a public entity, offering markets their first clear look at whether the AI revenue story is real.

Conclusion

SpaceX’s brief ascent past Amazon underscores the power of narrative and scarcity in today’s market. While the company’s core space business remains unprofitable, its AI ambitions have captured investor imagination — and billions in capital. Whether that bet pays off will depend on execution, revenue growth, and the eventual delivery of the AI-driven future Musk has promised.

FAQs

Q1: Why did SpaceX’s valuation spike so quickly after its IPO?
A1: The spike was driven by a limited number of shares available for trading (only 4% of total shares), combined with positive news including the Cursor acquisition and the start of options trading. Low float stocks are more susceptible to large price swings on moderate volume.

Q2: How does SpaceX’s valuation compare to its financial performance?
A2: SpaceX posted a $4.9 billion loss on $18.7 billion in revenue last year. Its peak valuation of $2.9 trillion far exceeds traditional valuation metrics, reflecting investor expectations for future AI-related revenue rather than current profitability.

Q3: What is the significance of the Cursor acquisition?
A3: Cursor is an AI coding startup being acquired for $60 billion in stock. The deal is part of Elon Musk’s strategy to rebuild SpaceX’s AI capabilities from the ground up, after acknowledging that his earlier AI company, xAI, was not built correctly the first time.