SpaceX has leapfrogged Amazon to become the world’s fifth most valuable company as it extends a blistering rally following its record-breaking initial public offering.SpaceX shares climbed as much as 14 per cent on Tuesday, its third day of trading after Friday’s IPO, which was one of the most anticipated debuts in stock market history. Trading in the shares was frenetic, with more than $30 billion (€26 billion) of turnover recorded by midmorning in New York.That took its gains for Elon Musk’s artificial intelligence (AI), rocket and satellite company to more than 50 per cent since the group listed on Nasdaq.SpaceX’s valuation on Tuesday reached $2.73 trillion, eclipsing Amazon’s $2.67 trillion. Elon Musk’s company also briefly surpassed Microsoft’s $2.93 trillion earlier in the session.Musk and Amazon founder Jeff Bezos, who also owns rocket company Blue Origin, have become rivals in a new space race, as well as jockeying for the title of world’s richest person.But the narrow gap between the two companies’ price tags belies a vast gulf between their underlying businesses. Amazon’s revenue grew to $717 billion last year, with net income of $78 billion, while SpaceX’s sales were $19 billion, with a net loss of $5 billion.Microsoft’s revenues for the year to June 2025 were $281.7 billion, with $101.8 billion in net income.The latest rally came as SpaceX announced a $60 billion deal to buy the maker of AI coding app Cursor. The agreement caps an extraordinary ascent for the four-year-old “vibe coding” start-up, which is already bringing in billions of dollars in annualised revenue.‘No profit and crap governance’ – is Elon Musk’s SpaceX actually worth $1.75 trillion? Listen | 41:54In a sign of surging investor demand, SpaceX on Monday exercised an option to sell more shares, increasing its proceeds from $75 billion to $85.7 billion.On Tuesday, SpaceX said it would exercise its option to acquire Anysphere, developer of Cursor, in an all-stock deal that expands the capabilities of its Grok model into the most lucrative corner of the AI market.The two companies struck a partnership in April that included the right for SpaceX to buy the San Francisco-based company.Software engineering has emerged as the most successful application of generative AI since OpenAI’s ChatGPT chatbot. However, SpaceX’s AI model, Grok, has lagged behind rivals OpenAI and Anthropic in developing tools capable of writing and debugging code, prompting its swoop on Cursor.Founded by four 20-somethings in 2022 as an alternative to Microsoft’s GitHub Copilot coding assistant, Cursor quickly became one of the fastest-growing start-ups that Silicon Valley has ever produced.Over the course of 2025, its valuation surged more than 10-fold, from $2.5 billion to nearly $30 billion, as the trend for “vibe coding” or fully automated software development took off.Cursor originally used Anthropic’s Claude model to power its coding agent. After Anthropic launched a competing product, Claude Code, last year, Cursor switched to its own models.The SpaceX IPO has made Musk, who owns just over 40 per cent of the loss-making company and has a large stake in Tesla, the world’s first trillionaire.Options on SpaceX, derivatives that let traders place highly leveraged bets on share prices, began trading on Tuesday, adding to the stock’s volatility. Bloomberg data showed around 540,000 SpaceX contracts had changed hands in the first hour of the session, roughly equivalent to the number of Nvidia options traded over the same period.“I don’t think it’s surprising that the options are very active, given how much hype there is around the stock and how volatile it’s been [since Friday],” said Christopher Jacobson, a derivatives analyst at Susquehanna. Bullish call options were so far proving more popular than bearish puts, he added.SpaceX’s corporate governance regime also gives Musk complete control of a company whose ambitions include founding a 1 million-strong colony on Mars and starting a lunar economy to build a network of orbital AI data centres.Investors in passive funds that track the Nasdaq, FTSE and MSCI are expected to give the shares a boost in the coming weeks after SpaceX was fast-tracked into the benchmarks.The debut of SpaceX, whose businesses include social media platform X and AI lab xAI, is set to help pave the way for Anthropic and ChatGPT developer OpenAI, both of which are working on their own trillion-dollar listings this year. – Copyright The Financial Times Limited 2026