The fate of a trillion-dollar giant: SpaceX is becoming its own biggest risk
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On the second day of SpaceX's listing, its market value briefly surpassed $3 trillion in after-hours trading, overtaking Microsoft to become the world's largest company for a short time. However, this short squeeze, highly driven by concentrated retail funds, is amplifying a time-tested historical pattern—the sheer size of a mega market cap often becomes the biggest drag on stock performance.
In after-hours trading, SPCX's share price soared to around $230, with a single-day market cap increase of over $650 billion. At the same time, Musk publicly predicted on the X platform that SpaceX's revenue will exceed $1 trillion by 2031. This not only far exceeds the conservative estimates of main underwriters Goldman Sachs and Morgan Stanley but also triggers potential compliance issues during the IPO quiet period.
Historical data provides a starker comparison. According to MarketWatch, research from investment consultancy Research Affiliates shows that, over the past 40 years, a portfolio of the world's ten largest companies by market cap has underperformed the global stock market by 1.8 percentage points annually. Since the start of this year, the ten largest US stocks by market cap have averaged a loss of 0.3%, while the S&P 500 has risen 8.5% in the same period. Currently, except for SpaceX, the top ten US stocks by market cap have an average P/E ratio as high as 68.4x, far higher than the S&P 500's overall 25.1x.
Low Float Sparks Squeeze: Highly Concentrated Retail Funds
SpaceX's first day of trading was relatively stable, but money soon smelled opportunity.
According to Vanda Track data, SPCX ranked first in net retail buying for two consecutive days. On just Monday's regular trading, net retail inflow reached $93.8 million, accounting for about 73% of the entire market's single-stock retail net buying that day. Over the past two days, retail cumulative net buying in SPCX is already near the total net retail buying for the entire US stock market last week.
The low float characteristic of SPCX is at the core of the squeeze logic.
After regular trading hours, buying continued to pour in during after-hours, pushing the price to climb further around $210. At $230, the market cap briefly exceeded $3 trillion, surpassing Microsoft (about $2.97 trillion at the time), and far above Apple's $2.65 trillion. With options set to start trading the next day, if another gamma squeeze occurs, the price could theoretically hit $400, making it the world's largest company by market cap ahead of Nvidia.
Nonetheless, Vanda Track pointed out that this rally did not lead to broad retail buying in the wider market. Semiconductor stocks MRVL, MU, SNDK, and AVGO saw small capital inflows, but at the same time, retail investors continued to increase holdings in SQQQ, SOXS, and other leveraged short ETFs. Vanda summarizes: "The broader signal hasn't changed: SpaceX failed to ignite a retail mania in the overall market, with funds highly concentrated in this single issue, and other sectors remain relatively cautious."
Historical Pattern: Market Cap Champions Rarely Long-term Winners
Huge market cap, in the face of historical data, often means lower expected returns.
According to MarketWatch, Research Affiliates' study shows a hypothetical portfolio that holds the ten largest global market cap stocks each year from 1980 to 2020 underperformed the global stock market by 1.8 percentage points annually.
If narrowed to holding only the biggest US stock by market cap each year, the annualized return from the end of 1980 to June 12 this year is 8.6%, lagging the S&P 500's 11.7% by 3.1 percentage points.
Robert Arnott, founder of Research Affiliates, says that in the institution's fundamental index, SpaceX ranks only 520th, with a float-adjusted weight of merely 0.0036%.
This figure reflects a key logic: SpaceX's current valuation status is more established on investor sentiment than its actual economic scale. Now that SpaceX has entered the top six US stocks by market cap, the pressure for valuation mean reversion it faces will be as real as that faced by giants like Nvidia, Apple, Alphabet, Microsoft, and Amazon.
Musk's Trillion Prediction Triggers Compliance Doubts
Only two days after the IPO, Musk repeatedly posted on the X platform: first saying "SpaceX might achieve about $1 trillion in revenue by 2030", then adding, "I'd be surprised if 2031 revenue doesn't exceed $1 trillion". These posts attracted wide investor attention and also brought potential legal risks.
US law usually requires companies to observe a quiet period of 40 days after an IPO, prohibiting the company and underwriters from making statements outside the scope of the prospectus.
Although SpaceX's prospectus mentions "trillion" 59 times, it doesn't contain these specific revenue forecasts. According to The Wall Street Journal, the two joint lead underwriters' forecasts are far more conservative: Goldman Sachs predicts $474 billion in revenue for 2030, and Morgan Stanley predicts $330 billion.
How the SEC will handle this potential violation is still unclear. Last month, Musk already reached a settlement with the SEC over the timing of his Twitter stock purchase disclosure, paying a $1.5 million fine, while the SEC had originally sought as much as $150 million.
SpaceX's full-year revenue last year was $18.7 billion—a more than 50-fold gap from Musk's trillion-dollar target. Two recent major deals—one with Google for a 32-month cloud service agreement at $920 million per month, and another with Anthropic for a three-year Colossus data center compute leasing agreement at $1.2 billion per month—will support revenue growth, but whether they can bridge the gap remains an open question.
Unlocking Timeline: Late June as the First Threshold
The strong performance of the stock price at this stage will face a real stress test at the end of June.
According to the IPO lockup schedule, early investors can sell up to 20% of their holdings after the second-quarter earnings report on June 30; thereafter, further sales can be phased over the next six months. Musk's personal lockup lasts one year.
At that time, once the short-term support from retail short-squeeze sentiment fades, SpaceX's share price performance will depend more directly on the market's rational pricing based on fundamentals. History tells us that becoming the world's largest company by market cap is never the finish line of victory—for trillion-dollar giants, it's often the starting point where risks begin to accumulate.
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