SynopsisSpaceX shares surged early on Tuesday as investors bet on Elon Musk's sprawling empire that spans rockets to AI, even though the stock carries a higher valuation than the other trillion-dollar behemoths.Global DeskSpaceX roared past Amazon's market valuation on Tuesday and briefly topped that of Microsoft, rapidly scaling the list of the world's most ​valuable companies on a topsy-turvy trading day fueled by frenzied action in ​the firm's newly listed option contracts. SpaceX shares rose 4.8 per cent to close at $201.80, giving Elon Musk's company a market value of roughly $2.655 trillion — ​some $800 billion more than its value when it sold its record initial public offering last week and about $10 billion more than that of Amazon, until Tuesday the fifth-largest U.S.-listed firm by market value.Shares surged early on Tuesday as investors bet on Musk's sprawling empire that spans rockets to AI, even though the stock carries a higher valuation than the other trillion-dollar behemoths. The stock is expected to enjoy additional demand in coming weeks as ‌it joins major indexes. Even ⁠so, selling ⁠was strong in the afternoon, with SpaceX shares giving back the majority of gains that at one point took them as high as $225.64.Why is SpaceX Stock Rising?A big driver of Tuesday's gains was the launch of options in SpaceX stock, which confer the right, though not the obligation, to buy or sell the shares at a certain price by a stated date. They are often used by traders seeking to cash in on rising interest in a stock or to wager that shares will rise or fall quickly.More than ​500,000 SpaceX options contracts changed hands within the first hour of trading and more than 1 million by early afternoon, ⁠according to ‌Trade Alert data. SpaceX's heavily bullish options trading volume likely helped lift the stock early in the session, said Brent Kochuba, founder of options analytics ​service SpotGamma.A surge of options ​volume can at times cause an underlying stock to also swing as options dealers, who facilitate trading by taking the other side of options ⁠trades, buy and sell shares to square their own risk.SpaceX SharesTrading volume in SpaceX shares was enormous, with turnover in the rocket ​company's shares, reflecting the approximate dollar value of the day's trades, the highest among large U.S.-listed firms at $61 billion.The latest gains in SpaceX shares came on a day when technology stocks were otherwise slipping, with the semiconductor index down 3% and the Nasdaq Composite off 0.5%. Among the decliners were shares of options exchange Cboe Global Markets, off 9%, while rival CME Group was down 2%, the latest sign of investor angst over the rise of perpetual futures — contracts with no expiration date that enable traders to bet on price moves without owning shares or other assets.SpaceX ValuationAnalysts and portfolio managers said investors should brace for volatility due to the relatively small float and high valuation of SpaceX. The company reported sales of $18.67 billion last year and a net loss of $4.94 billion after merging with money-losing xAI, in contrast to many of Wall Street's big technology companies that have posted bumper profits.On Tuesday, its market value ​surpassed Amazon's at $2.646 trillion and briefly topped Microsoft's $2.92 trillion. Next up are Apple, Alphabet and Nvidia, all above $4 trillion in market value.The rally could continue, analysts said, 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 indexes effective June 26 and June 29, respectively.SpaceX also said on Monday that its underwriters had exercised the "greenshoe" option to purchase additional shares, increasing the total proceeds from its initial public offering to $85.7 billion from the $75 billion it raised last week.Read More News on(Catch all the US News, UK News, Canada News, International Breaking News Events, and Latest News Updates on The Economic Times.) Download The Economic Times News App to get Daily International News Updates....moreless