An option to buy AI coding start-up Cursor for $60 billion has been the practical hinge for investors, pushing SpaceX's market value to roughly $2.78 trillion, a shade ahead of Amazon despite far smaller revenue and sizeable losses. In the days after the largest US initial public offering on record, SpaceX shares jumped more than 50 percent from the $135 IPO price, after the Nasdaq listing raised $85.7 billion and opened public trading for the first time. Investors are treating the firm as both a launch, satellite and AI play, bidding up the stock on expectations that Cursor's code-writing tools could accelerate xAI and create enterprise revenue, according to company statements and filing material.

Investors have valued SpaceX like a combined launch, satellite and AI giant, yet the company reported comparatively modest recent revenue while posting multi-billion-pound losses. That mismatch underlines how market appetite is pricing long-term optionality rather than current earnings. The Nasdaq listing, which initially sold shares at $135, produced a fast rerating: within days the price rose into the low $200s and headline market value surged to roughly $2.78 trillion.

Why the price is divorced from today's numbers

The public filing and SpaceX press statements describe a business group that now includes rocket manufacture and launches, the Starlink satellite internet operation, the social platform X and Musk's AI unit xAI. Company disclosures show Starlink as the only consistently profitable division inside the broader group, while other units including the rocket business and xAI remain loss-making and investment-heavy. By contrast, Amazon reports annual sales in the hundreds of billions and remained profitable in early 2026, which underlines the gap in earnings power between the two firms.

Part of the market's revaluation follows the Cursor tie-up. SpaceX and Cursor entered a commercial arrangement that gave SpaceX an option to buy Cursor for $60 billion, according to company statements and filing material. Cursor, owned by parent Anysphere, specialises in AI tools that automate code writing. SpaceX argues those users and datasets could accelerate xAI's product development and give it an enterprise AI route without building every key piece in-house.

Some analysts say gaining an established coding tool is a faster route to enterprise AI revenue than trying to win the model race internally, and they note the strategic fit for a firm that can offer large-scale computing capacity. Those assessments help explain why investors have been willing to pay up for optionality that hinges on successful integration and commercialisation of the AI assets.

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Market structure and momentum

Market structure has amplified the move. A small public float makes the stock sensitive to retail demand and momentum trading.

The Nasdaq listing raised $85.7 billion and made public trading possible for the first time, but liquidity remains constrained and the price has been volatile since the IPO.

Venture capitalist Eileen Burbidge told the BBC that many traders appear to be buying into a "well-marketed opportunity" to invest in Musk and his vision rather than evaluating SpaceX on traditional financial fundamentals. Dan Sheehan of Telos Wealth Advisors warned smaller shareholders could pay a premium now that might be diluted if large institutional holders sell later. Portfolio manager Eric Clark at Accuvest Global Advisors described the valuation as lacking support from fundamentals and driven by retail excitement and momentum.

The Cursor agreement itself doubles or more the startup's previous private valuation cited at its last funding round, according to company disclosures, and confirms that an earlier partnership granted SpaceX a formal path to acquisition. That structure is the practical lever for investors who are buying expectations: pay now for access to potential future revenue streams tied to AI and developer engagement.

On the operational side, the contrast couldn't be starker. SpaceX's rocket business and xAI are capital intensive, requiring continued cash to scale, while Starlink supplies recurring revenues and is singled out in filings as the unit with steady profitability. Amazon, by contrast, carries scale and free cash flow that support both ongoing investment and convincing profit metrics under traditional valuation approaches.

For public investors the change is immediate. SpaceX equity is tradeable on Nasdaq and the company sits among the top global market capitalisations, but with a small free float the practical risks and rewards of holding the shares are unusually concentrated. Whether the market has bought a durable redefinition of the company or a speculative premium will turn on execution of the AI strategy and on what happens to the Cursor option before the year is out.

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The concrete next step is procedural: resolution of the $60 billion Cursor option, likely later this year.

This article was created with AI assistance.