Stock’s blistering post-IPO run has investors betting on Musk’s broader ambitions in AI, even as some analysts call the valuation overheated
Space Exploration Technologies Corp., the Elon Musk-led rocket and satellite company known as SpaceX, vaulted past Amazon.com in market value this week, becoming the world’s fifth most valuable public company in just three trading sessions since its initial public offering.
SpaceX jumped for a third straight day on Tuesday, overtaking Amazon to become the fifth-largest stock in the world, with shares closing 4.8% higher and pushing its market capitalization to about $2.65 trillion — roughly $10 billion more than Amazon’s. At its intraday high, the company’s value briefly topped Microsoft’s to become the world’s fourth-largest stock before paring back some gains.
The rally followed what was the largest IPO in history, with SpaceX debuting on the Nasdaq the previous Friday and closing up 19% on its first day of trading. The company later disclosed that underwriters had fully exercised their over-allotment option, pushing total proceeds from the offering to $85.7 billion.
Beyond rockets and satellites, the company has expanded into artificial intelligence. SpaceX operates the Grok large language model, runs the X platform, and is building computing infrastructure to support advanced AI systems — businesses that, alongside its Starlink satellite-internet service, investors are increasingly treating as the core of the bull case for the stock.
The company’s first-quarter results, included in its public filings, showed revenue of $4.7 billion, up 15.4% from a year earlier, alongside an operating loss of $1.94 billion and a net loss of $4.3 billion. The company’s heaviest spending went toward AI infrastructure, where it invested $7.7 billion in the quarter. Management has pointed to major AI computing agreements, including one with Alphabet’s Google reportedly worth roughly $11 billion annually beginning later this year, and another with Anthropic that, combined with the Google deal, could bring in roughly $26 billion in annual revenue.
Not everyone is convinced the valuation is justified. CFRA analyst Keith Snyder rates the stock a “Sell,” citing heavy reliance on Starship, which has yet to reach full commercial deployment, and a cash-intensive business model that requires investors to take Musk’s longer-term ambitions on faith. Miller Tabak’s Matthew Maley said the IPO was “executed brilliantly” but argued the stock’s valuation — implying a price-to-earnings multiple approaching 100 times — is too rich compared with roughly 31 times for Nvidia and 36 times for Apple. Morningstar’s Nicolas Owens has called the shares significantly overvalued.
Others remain bullish. Steve Westly, founder of the Westly Group and a former Tesla board member, said retail investors have poured roughly $100 billion into the stock, and pointed to Musk and SpaceX President Gwynne Shotwell as a team capable of executing on the company’s ambitions, even as he cautioned that investor patience could fade if growth targets aren’t met.