By Shashwat ChauhanShares of Elon Musk’s SpaceX rose more than 8% on Tuesday, sending its market valuation above Amazon.com and making it the world’s fifth-most valuable company.Shares of the rockets-to-AI company were last up 8.7% at $209.30, jumping more than 54% above the $135 initial public offering (IPO) price and giving the company a market capitalisation of about $2.75-trillion if gains hold.Amazon’s valuation stands at $2.65-trillion, Microsoft’s at $2.92-trillion, and the world’s top three companies exceed $4-trillion in market value.“We can say with certainty that this valuation makes absolutely no sense today. People are buying SpaceX in the expectation that others will buy too and push the price higher ― that’s speculation,” said Ipek Ozkardeskaya, senior market analyst at Swissquote Bank.The company reported sales of $18.67bn last year and a net loss of $4.94bn after merging with money-losing xAI ― in contrast to many of Wall Street’s big technology companies that have posted bumper numbers.SpaceX options activity also began trading on Tuesday.“Today the SPCX options launch, offering standard monthly expiration and strikes ranging from $25 to $380. If call demand is heavy, dealers might be forced to buy SPCX into this low-liquidity situation,” said Brent Kochuba, founder of option analytics platform SpotGamma.“Starting next week we may see index demand increase, with more shares not slated to be made available for one or two months.”Analysts and portfolio managers said investors should brace for volatility, particularly early on in SpaceX’s life as a public company, due to its relatively small float and high valuation.The rally could continue as SpaceX is set for fast-track inclusion in the Nasdaq 100, which 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.FTSE Russell and MSCI are also set to add the stock to their indices, effective June 26 and June 29, respectively.“While index inclusion alone is typically insufficient to drive sustained repricing, we see the combination of passive flows, momentum and limited float driving upside beyond historical index-addition moves,” brokerage Zephirin Group said, initiating coverage on the stock with a “buy” rating.SpaceX said on Monday that its underwriters had exercised the “greenshoe” option to purchase additional shares, increasing the total proceeds from its IPO to $85.7bn from $75bn that it raised last week.More than $9.1bn worth of SpaceX shares exchanged hands in morning trade, which was several times the trading volumes in Nvidia, Microsoft, Tesla and Apple combined.Other heavyweight technology stocks, including Nvidia and Microsoft, were trading slightly lower.SpaceX shares had cut some gains in premarket trading on Tuesday after the company said it would acquire software company Anysphere for $60bn.