SpaceX is already worth more than Amazon. So why are analysts sounding the alarm?

Two days after going public, Space X is already bigger than both Amazon and Microsoft. With Tuesday’s early market gains adding to Monday’s advance, Elon Musk’s rocket-and-AI company boasted a market cap of $2.95 trillion as of 10:05 a.m. ET. That put it ahead of Amazon’s $2.66 trillion and briefly above Microsoft’s $2.93 trillion. It has since fallen below Microsoft’s market cap again. It’s a remarkable feat, one that defies rational explanation but underscores investors’ intense appetite for AI—and the magnetic draw of Elon Musk. With the boost, SpaceX briefly became the fourth-largest company on Wall Street by market value. It currently sits at fifth. Apple is currently the third-largest publicly traded company on Wall Street, with a $4.4 trillion market cap. Alphabet stands at $4.5 trillion, and Nvidia leads the pack at $5.1 trillion. Up, up and away It has been a remarkable short run for SpaceX, which began trading midday Friday with a market cap of just under $1.8 trillion. The surge in valuation is even more notable because many Wall Street analysts have warned investors that the company appears artificially inflated. Prior to the IPO, Morningstar launched coverage of SpaceX, with analyst Nicolas Owens saying his fair value estimate of the company was roughly $780 billion—less than half of the company’s target at the time. “We think the company has been significantly overvalued and investors will have opportunities to buy the stock at more attractive levels after the IPO,” he wrote. He wasn’t alone in his warnings. Aswath Damodaran, a professor at NYU’s Stern School of Business best known as the “dean of valuation,” said he believed SpaceX’s equity value was roughly $1.3 trillion, nearly half a trillion less than the company claimed. And Ed Elson, an analyst who also co-hosts the Prof G Markets podcast with entrepreneur Scott Galloway, said the pre-IPO valuation defied all logic. “The stock is set to be priced at 107 times sales, which would make i