SpaceX vaults over US$2 trillion valuation as stock jumps after record IPO

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SpaceX jumped 23 per cent in its Nasdaq debut on Friday, as investors piled in to the world’s largest IPO and bet on Elon Musk’s sprawling empire spanning rockets, internet service and AI.

The stock was last trading at US$166 a share after opening for trading at US$150, making SpaceX the sixth-largest U.S. company, with a market value above US$2 trillion.

The company’s debut is widely viewed as a dress rehearsal for a new generation of mega-listings, with market participants watching for signals on investor appetite ahead of forthcoming IPOs for AI heavyweights Anthropic and OpenAI.

SpaceX’s stock performance was being closely scrutinized in part because some bankers said the IPO market could face difficulties if SpaceX shares close below Thursday’s pricing level of US$135 a share.

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The landmark listing cemented Musk’s status as the first trillionaire ever - even though the firm posted a loss of nearly US$5 billion last year and generated only a fraction of the revenue brought in by similarly valued tech giants.

“Elon deserves an extreme premium because of his track record and his vision for calling technology trends early,” said Shaun Maguire, a Sequoia Capital partner who led the firm’s investment in SpaceX. At the IPO price its US$2 billion investment would be worth over US$20 billion, a person familiar with the matter told Reuters.

SpaceX President Gwynne Shotwell and Chief Financial Officer Bret Johnsen rang the Nasdaq opening bell earlier on Friday.

World’s largest IPO

The IPO is a culmination of Musk’s long-held ambitions in space and technology, and has stood out for rewriting Wall Street’s IPO playbook and drawing legions of retail investors into the market.

At US$75 billion, the deal’s proceeds were more than double those of Saudi Aramco’s record-setting 2019 IPO.

The valuation could rise further should underwriters exercise their right to sell additional shares, a decision typically made within 30 days after the offering.

Although SpaceX may have to wait for entry into the S&P 500, its expected fast-track inclusion in the Nasdaq 100 will soon make it a major holding for passive funds and ETFs that track the index, creating a fresh source of demand for its shares.

“We have to go back 100 years to get comparable entrepreneurs. He’s a visionary unlike others, and he executes extremely well,” said Joel Shulman, CEO of ERShares, which manages an ETF that has an exposure to SpaceX.

It will take about a month before it gets added to that index under Nasdaq’s new fast-entry rules, as opposed to a typical wait of as much as a year.

Some analysts expect SpaceX’s debut to trigger a reshuffling of investor portfolios, creating selling pressure on other technology heavyweights as funds rotate into the stock. On Friday, shares of other space firms and satellite companies declined sharply, reversing gains spurred by SpaceX’s April IPO filing, with Planet Labs down eight per cent and EchoStar down 14 per cent.

A US$28.5 trillion market opportunity

For all the excitement surrounding the IPO, determining what SpaceX is actually worth remains a difficult valuation exercise.

SpaceX said its market opportunity spans US$28.5 trillion, a figure it called the largest in human history. With its leading position in space - the firm says its operation is responsible for more than four-fifths of the mass launched into orbit over the past three years - and revenues from Starlink, some investors said it has a strong foundation upon which to build.

John Belton, portfolio manager at Gabelli Funds, said the best comparable to SpaceX is Musk’s electric vehicle company Tesla, as each has an established business and “a moonshot opportunity on the other side.”

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“For Tesla, that’s things like humanoid robotics and other future applications. For SpaceX, it’s the AI business,” he said.

With revenue of US$18.7 billion in 2025, the company’s market cap puts its price-to-revenue ratio at a lofty 94. Some analysts have already issued positive ratings on the company. Morningstar analysts this month said it is more fairly valued at around US$780 billion, and CFRA on Friday started coverage with a sell rating.

“This is not a name you’re buying based on fundamentals. For me, the analogy is Amazon. This was a company that changed the way we live,” said Nancy Tengler, CEO and CIO of Laffer Tengler Investments. “If the stock drops to US$100, that’s not ideal, but it wouldn’t change our long-term view. We want to participate.”

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Reporting by Manya Saini and Niket Nishant in Bengaluru and Echo Wang in New York; Additional reporting by Sriparna Roy in Bengaluru; Editing by Colin Barr, Dawn Kopecki, David Gaffen, Anil D’Silva and Matthew Lewis