SpaceX has made a new leap in the ranking of the most capitalized companies in the world, overtaking Amazon and temporarily reaching beyond Microsoft. Supporting the stock’s rise was an extremely volatile trading day, characterized by intense activity on newly launched options contracts.
SpaceX surpasses Amazon and aims for the top places
SpaceX shares rose 4.8% to close at $201.80. Elon Musk’s company has thus reached a valuation of around 2,655 billion dollars, around 800 billion more than the value recorded during its record IPO last week and around 10 billion more than the capitalization of Amazon, which until Tuesday occupied fifth place among US listed companies by market value. In the first hours of the session, the stock had recorded even more marked increases, supported by investors who placed their bets on Musk’s industrial empire, which ranges from rockets to artificial intelligence, despite the company’s valuation being higher than that of other companies worth over a trillion dollars.
The stock should benefit from further demand in the coming weeks thanks to its entry into the main stock indexes. However, selling intensified during the afternoon and shares gave back much of their accumulated gains, after hitting an intraday high of $225.64.
Exceptional trading volumes
Trading volumes in SpaceX shares have been enormous. Trading value in the aerospace company’s stock reached $61 billion, the highest level among large companies listed in the United States during the day.
SpaceX’s latest rise came in a session in which, on the contrary, the technology sector showed weakness. The SOX semiconductor index lost 3%, while the Nasdaq Composite fell 0.5%.
Among the declining stocks were also those of Cboe Global Marketsdown 9%, and its competitor CME Groupdown 2%. The move reflects growing investor concerns about the rise of perpetual futures, contracts with no expiration that allow you to bet on price movements without directly owning the underlying assets.
Expected volatility and future prospects
Analysts and portfolio managers believe investors should prepare for high volatility, due both to the relatively limited amount of shares available on the market and the company’s high valuation.
SpaceX reported revenues of $18.67 billion last year and a net loss of $4.94 billion after its merger with xAI, which also made a loss. The figure contrasts with the results of many of Wall Street’s major technology companies, which instead recorded consistent profits.
In yesterday’s session, Tuesday 16 June, SpaceX’s capitalization exceeded that of Amazon, equal to 2,646 billion dollars, and for a short time it also exceeded that of Microsoft, equal to 2,920 billion.
In the ranking of the most capitalized companies, Apple, Alphabet and Nvidia remain ahead, all with a valuation of more than 4,000 billion dollars.
According to analysts, the rally could continue thanks to SpaceX’s impending accelerated inclusion in the Nasdaq 100, which will make it a significant holding for passive funds and ETFs that track the index, creating a new source of demand for the stock.
FTSE Russell and MSCI will also include the stock in their respective indices on June 26 and 29.
IPO proceeds increase
SpaceX also announced earlier this week that the placing banks have fully exercised the “greenshoe” option to purchase additional shares. As a result, overall proceeds from the initial public offering rose to $85.7 billion compared to $75 billion raised during the previous week’s placement.
