NEW YORK: SpaceX shares surged in premarket trading, putting the firm on track to overtake Amazon.com Inc as the fifth largest publicly traded company in the world just days after its blockbuster debut.
Shares jumped as much as 19% in early trading before paring those gains to about 8%.
The premarket gain builds on a more than 40% jump across SpaceX’s first two sessions after its record initial public offering (IPO).
If it holds through the trading day, the move would lift the market value of Elon Musk’s rocket and artificial intelligence (AI) company to more than US$2.7 trillion, above Amazon and up nearly US$1 trillion from its IPO.
The gains are a sign of consistent investor demand for the stock, calming fears that the record IPO would be too large for the market to digest. The performance paves the way for potential public offerings this year from AI competitors Anthropic PBC and OpenAI, both expected to be in the US$1 trillion valuation range.
SpaceX announced Tuesday that it has formally agreed to take over Cursor in a deal that values the AI coding startup at US$60bil.
Cursor investors will have the right to receive SpaceX stock based on the implied equity value of Cursor, according to a company filing.
“We are seeing signals that investors remain willing to fund high-growth capital intensive businesses that trade at elevated valuations,” said Angelo Kourkafas, senior global investment strategist at Edward Jones.
“So it is in a way, a pro-risk or risk-on signal that we’re not seeing any signs of fatigue about growth-oriented names.”
Retail traders have been a key driver of the rally, buying as much SpaceX stock over its first two days of trading as they purchased across the entire US stock market last week, according to data from Vanda Research.
“There is only one stock retail care about right now ... SpaceX,” Vanda wrote in a note.
“Retail investors continue to direct capital into this one name, while maintaining a relatively cautious stance elsewhere.”
To be sure, at least some of the price action has been driven by the relatively small number of SpaceX shares available to trade, with only about 4.2% accessible on day one. — Bloomberg
