SpaceX tops Amazon in market value, briefly overtakes Microsoft

SpaceX surged past Amazon.com in market capitalisation on Tuesday, briefly overtaking Microsoft during intraday trade, as frenzied activity in newly listed options contracts triggered sharp swings in one of the most closely watched stock debuts in recent years.

Shares of the Elon Musk-led aerospace and AI firm closed 4.8 per cent higher at $201.80, giving it a market value of about $2.65 trillion. At that level, SpaceX stood roughly ahead of Amazon and, for a brief period during the session, moved above Microsoft in market ranking before losing some momentum later in the day.

The stock’s intraday volatility came amid heavy derivatives-driven trading, with investors piling into options contracts that allow bets on future price movements. More than 500,000 contracts reportedly changed hands within the first hour of trading, with volumes crossing one million by early afternoon, according to market data cited by trade analytics firms.

More from Business

The sharp price action underscores how derivatives activity is increasingly shaping underlying equity moves in newly listed megacap firms.

Options frenzy fuels momentum

The launch of options trading in SpaceX shares emerged as a key catalyst behind Tuesday’s volatility. Options contracts — widely used by institutional and retail traders to hedge or speculate — can amplify stock moves when market makers adjust positions by buying or selling underlying shares to manage risk.

The stock’s turnover, measured by the notional value of shares traded, reportedly reached $61 billion, making it one of the most actively traded US-listed equities by dollar volume.

Small float, large impact

A key structural factor behind the volatility is the limited supply of freely tradable shares. Only about 4.2 per cent of SpaceX stock was available in the public market at launch, amplifying the impact of demand surges.

That imbalance between supply and demand has made the stock particularly sensitive to retail participation and derivatives flows, with even modest buying pressure translating into outsized price moves.

At its intraday peak, SpaceX shares reached as high as $225.64 before giving up some gains in the latter half of the session.

Despite the pullback, the stock remains significantly above its initial public offering price, extending a rapid post-listing rally that has drawn comparisons with momentum-driven “meme-like” trading patterns.

Valuation reshuffles global rankings

The latest surge has reshaped global market rankings, placing SpaceX among the world’s top five most valuable listed companies.

At its peak, the company’s valuation briefly surpassed Microsoft before settling lower, while still remaining ahead of Amazon. It now sits behind megacap peers such as Apple, Alphabet, and Nvidia, all of which command valuations above $4 trillion.

The rally comes despite SpaceX reporting comparatively modest revenues relative to Big Tech peers. The company generated about $18.7 billion in revenue last year and reported a net loss of $4.94 billion, partly reflecting costs associated with its merger involving xAI.

By contrast, Microsoft and Amazon reported revenues several multiples higher, underscoring the divergence between SpaceX’s valuation and its current earnings profile.

Index inclusion and passive inflows in focus

Market participants expect further volatility ahead as SpaceX is set for potential inclusion in major equity indices, including the Nasdaq 100. FTSE Russell and MSCI are also expected to add the stock later this month.

Such inclusions typically trigger forced buying from passive funds and exchange-traded funds that track benchmark indices, potentially creating additional demand pressure in a stock with limited supply.

Nasdaq has also moved to accelerate the eligibility timeline for large companies, raising expectations that SpaceX could be incorporated into key benchmarks sooner than traditional listing timelines would allow.

However, S&P Dow Jones Indices has not adopted similar changes, meaning immediate inclusion in the S&P 500 remains unlikely.

Volatility outlook and lock-up risk

While momentum remains strong, analysts caution that volatility is likely to persist due to the structural characteristics of the stock and its ownership base.

A significant portion of insider holdings remains locked under standard post-listing restrictions, with larger sell-downs expected only after earnings milestones and lock-up expiries. Elon Musk’s stake, in particular, is locked for at least a year.

Market strategists warn that the “true clearing price” of the stock may only emerge once these restrictions begin to ease and additional supply enters the market.