Key Points
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SpaceX opened at $168 per share, a 22% jump from its $135 IPO price, pushing its market cap above $2.2 trillion.
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Amazon and Microsoft fell slightly on above-average volume, suggesting investors sold some of their existing tech holdings to fund SpaceX purchases.
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Oil prices fell more than 2% as investors grew hopeful that U.S.-Iran peace talks could reopen the Strait of Hormuz.
- 10 stocks we like better than Space Exploration Technologies ›
Wall Street had one job Friday: watch Space Exploration Technologies (NASDAQ: SPCX) take off.
The Dow Jones Industrial Average (DJINDICES: ^DJI) rose 0.4% by noon ET, while the S&P 500 (SNPINDEX: ^GSPC) added 0.1%. The Nasdaq Composite (NASDAQINDEX: ^IXIC) index dipped 0.1%, weighed down by some familiar names making room for the new kid on the block.
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The indexes bounced around in the morning but never strayed far from flat. The real action was elsewhere. And even a new $2 trillion player rising 23% (as of this writing at 12:19 p.m. ET — probably some other figure by the time you read this) wasn’t able to lift a Nasdaq index dominated by titans in the $4 trillion club.
All eyes on SpaceX
Friday’s Wall Street feels a lot like rocket-launch days at Cape Canaveral. Everything stood still, awaiting the majestic launch of a massive spaceship. None of the top indexes moved more than 1.2% in the morning, and they all trended back toward breakeven around noon.
SpaceX, for its part, delivered the drama. The official launch price was $135 per share, but trading opened at $168. That’s a 22% jump, maxing out at a $2.2 trillion market cap. Elon Musk’s combined space exploration and AI business is worth more than Walmart (NASDAQ: WMT) and Berkshire Hathaway (NYSE: BRKA) (NYSE: BRKB) combined, roughly matching the gross domestic products of Canada or Brazil.
It’s the largest public offering ever, and Friday’s pop suggests investors wanted in even at that lofty price. And the SpaceX IPO shuffled how deep-pocketed investors allocate their funds today. Mega-caps Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT) are down modestly on above-average trading volume, slicing $55 billion and $21 billion off their market caps, respectively. I can’t prove this thesis, but I expect a significant portion of these tech titan investments simply moved over to SpaceX.
SpaceX’s successful debut bodes well for OpenAI and Anthropic, both of which are expected to go public later this year. If investors will pay $2 trillion for rockets and Starlink, they’ll probably show up for chatbots and AI security systems, too.
Iran deal: maybe, maybe not
It took me this long to get into today’s geopolitics, because the SpaceX launch seems to have dampened everything else. Again, none of the major indexes is making a big move, and their top components neither soared nor crashed, either.
But there’s still plenty of news to share from the Persian Gulf. Oil prices have bounced around today, with the United States Oil Fund (NYSEMKT: USO) currently down 2.1%. Some sources say that the Iranian conflict should end soon, though the Trump administration condemns Iran’s recent drone strikes. Conflicting media reports make it difficult to guess what the final peace agreement will look like, or when it will be signed. But investors see hope in the ongoing talks, so oil prices are trending down.
Image source: Getty Images.
Friday was SpaceX day and the normally headline-minting market indexes were more of an afterthought. The rotation out of Microsoft and Amazon is worth watching. If SpaceX’s gain is just recycled Magnificent Seven money, the net effect on portfolios is a wash. If it’s fresh capital entering the market, that’s a different story.
SpaceX just proved that investors will show up for a $1.77 trillion debut and bid it even higher. OpenAI and Anthropic are taking notes.
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Anders Bylund has positions in Amazon and Walmart. The Motley Fool has positions in and recommends Amazon, Berkshire Hathaway, Microsoft, and Walmart. The Motley Fool has a disclosure policy.
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