SpaceX overtakes Amazon with $2.73 trillion valuation on third trading day, announces $60 billion Cursor deal

Market surge on day three

SpaceX shares climbed as much as 14 percent on Tuesday, their third day of trading after Friday's historic Nasdaq debut, reaching an intraday high above $225 before settling around $209 to $210. The stock had already gained 19 percent on Friday and 20 percent on Monday, bringing total gains since the IPO to more than 50 percent. The company's valuation reached $2.73 trillion, eclipsing Amazon's $2.67 trillion, and briefly surpassed Microsoft's $2.93 trillion earlier in the session. Trading was frenetic, with more than $30 billion of turnover recorded by midmorning in New York.

A vast gulf in fundamentals

The valuation gap between SpaceX and its new peer group belies a dramatic disparity in underlying business scale. SpaceX generated $18.7 billion in revenue last year and posted a record loss of nearly $5 billion, according to the Neue Zürcher Zeitung. Amazon, by contrast, reported $717 billion in revenue for 2025 with net income of $78 billion. Microsoft's revenues for the year to June 2025 were $281.7 billion, with $101.8 billion in net income. The Irish Times cited this gulf directly, noting the narrow price-tag gap masks a vastly different earnings reality.

Cursor acquisition

On Tuesday SpaceX confirmed it will exercise its option to acquire Anysphere, the San Francisco-based developer of coding app Cursor, in a $60 billion all-stock deal. The two companies had struck a partnership in April that included a purchase option; Musk chose to wait until after the IPO before deciding. Cursor, founded in 2023, created a programming environment that lets developers tap specialised AI models and third-party models for code generation, making it a pioneer of so-called vibe coding. The deal extends the capabilities of SpaceX's Grok model into the most lucrative corner of the AI market. Grok has lagged behind OpenAI, Anthropic and Google in code-writing tools, prompting the swoop on Cursor.

SpaceX posted a loss of $5 billion last year. It takes a good dose of imagination to justify such a valuation level.

Retail demand drives the rally

Analysts say the rally is being propelled by retail investors who missed out on the IPO allocation and are now buying at any available price. Data from Vanda Research show that retail investors bought as many SpaceX shares in the first two trading days as they had across the entire US stock market the previous week. Less than 5 percent of SpaceX equity is freely tradable; the rest is held by Musk, early investors and employees whose shares are locked up for several months. Leveraged ETFs tied to SpaceX generated more than $1 billion in trading volume on their first day. The banks underwriting the IPO earned roughly $500 million in total fees, with Goldman Sachs and Morgan Stanley as the biggest beneficiaries.

The high demand is not surprising. There were many investors, particularly retail, who initially could not get in.

Broader market and geopolitical tailwinds

The SpaceX IPO, the largest in history, raised $75 billion initially and grew to $85.7 billion after the overallotment option was exercised Monday. The offering's success appears to be clearing a path for the pending IPOs of AI companies OpenAI and Anthropic. Global equity markets have also benefited from a sharp decline in oil prices following the announcement of a US-Iran framework agreement and the prospect of the Strait of Hormuz reopening.

Markets still retain a certain momentum after the strong stock market rebound on Monday triggered by the announcement of a US-Iran deal.

SpaceX COO Gwynne Shotwell, interviewed by CNBC on IPO day, said a merger between SpaceX and Tesla might make Elon Musk's life a little easier. Musk himself posted on X: "I love the incredible people of SpaceX beyond words." His personal fortune, swollen by the IPO that made him the world's first trillionaire, reached nearly $1.3 trillion after the first two trading days, according to Bloomberg calculations.