SpaceX’s blistering rally since its stock market debut is reigniting concerns that investor enthusiasm for artificial intelligence and technology stocks may be pushing valuations into bubble territory, with some market observers also drawing comparisons to the meme-stock frenzy that gripped Wall Street in recent years.
The Elon Musk-led company has surged nearly 50% from its initial public offering price of $135 in less than a week, vaulting into the ranks of the world’s most valuable companies despite reporting losses and offering no clear timetable for profitability from several of its ambitious long-term projects.
Analysts say the stock’s rapid ascent highlights a growing disconnect between valuations and fundamentals across parts of the technology sector.
Swissquote’s Ipek Ozkardeskaya said SpaceX’s surging share price after its IPO last week is a signal that rising technology stocks could be in bubble territory.
“SpaceX is perhaps the biggest red flag that today’s technology rally is reaching a point where valuations no longer make sense,” Ozkardeskaya, said.
The stock was up by about 3% during premarket trading on Wednesday.
Valuation climbs despite unanswered questions
SpaceX shares rose 4.8% on Tuesday to close at $201.80, giving the company a market capitalization of roughly $2.7 trillion.
The gain allowed SpaceX to surpass Amazon in market value and briefly overtake Microsoft during intraday trading before retreating later in the session.
The company’s valuation has increased by roughly $800 billion since its IPO last week.
The rally has come despite lingering questions about the profitability of several key initiatives, including its AI investments and broader space infrastructure ambitions.
SpaceX generated $18.7 billion in revenue last year but reported a net loss of $4.9 billion after incorporating the results of xAI, which remains heavily loss-making.
Unlike many of Wall Street’s largest technology companies, SpaceX has yet to demonstrate the sustained profitability that typically supports multi-trillion-dollar valuations.
Volatility fuels meme-stock comparisons
Tuesday’s trading session further underscored investor concerns about speculative activity surrounding the stock.
SpaceX shares surged as high as $225.64 during the day before surrendering most of those gains by the close.
“It’s a $2.5 trillion company, but it certainly feels like one of those meme stocks, the way it’s trading,” said Joe Saluzzi, co-head of equity trading at Themis Trading in a Reuters report.
“We’ve seen momentum in the past; they just tend to run and you have to be very, very careful with these types of names.”
Saluzzi is not the only one. CNBC host and market expert Jim Cramer also compared SpaceX to a meme stock.
Maybe it's okay to you, but I would hate to see a meme stock–what SpaceX stock has become–walked to the size of Nvidia over a series overnight moves with no sellers. But that seems to be the goal. Maybe early release of those who want to go?? I am uncomfortable watching a stock go up ten points in a couple of hours of trading. And i LIKE the stock!!
Market participants noted that SpaceX’s relatively small public float has amplified price swings, making the stock particularly vulnerable to bursts of speculative demand.
The company is expected to receive additional support in the coming weeks as it is added to major stock indexes, prompting purchases from passive investment funds and exchange-traded funds.
Options frenzy adds fuel to rally
Investor appetite for SpaceX was particularly evident in the options market, where trading activity exploded on the first day options became available.
Nearly one million SpaceX call options changed hands on Tuesday, making the stock the fifth-most actively traded options name in the market.
The volume placed SpaceX alongside some of the most heavily traded securities, including Nvidia, Tesla, the Invesco QQQ Trust and the SPDR S&P 500 ETF.
Call options, which allow investors to profit from rising share prices, dominated activity and reflected continued bullish sentiment.
“The volume is even more notable because weekly options have not been listed yet; those are expected to start trading Thursday, which could further increase short-dated activity and retail participation,” said Chris Murphy, co-head of derivatives strategy at Susquehanna Investment Group.
Murphy highlighted several aggressive bullish trades, including purchases of thousands of July call options with strike prices far above current trading levels.
At the same time, some investors were using more defensive strategies.
Large collar trades involving put purchases and call sales suggested certain shareholders were seeking protection against a potential decline, particularly ahead of future lock-up expirations.
Analysts caution that such intense options activity can amplify volatility by encouraging short-term speculation and accelerating price movements in either direction.
For now, SpaceX remains one of the market’s hottest trades.
But as valuations climb further into uncharted territory, questions are mounting over whether investor optimism is being driven by business fundamentals—or by the belief that someone else will be willing to pay even more tomorrow.
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