SpaceX shares surged 20% on the second day of trading. What investors should watch next

Shares of Elon Musk's space company, SpaceX, surged 19.6% on their first full trading day, pushing its market capitalization past the $2.5 trillion mark.

SpaceX shares are set to be rapidly added to index funds, which will also contribute to their growth; however, some analysts warn that investors should brace for volatility, especially in the first few months. The price could fluctuate significantly due to the relatively small number of shares in free float and the high valuation, Reuters reports.

Retail investors, who received about 20% of the allocation during the IPO, invested $117 million in SpaceX shares on the first day of trading alone. These shares accounted for more than half of all retail purchases on the market, according to data from Vanda Research. On Monday, investors continued to buy them: optimism was fueled by Elon Musk’s promise that SpaceX’s revenue could reach $1 trillion by 2030. In 2025, the company generated $18.7 billion in revenue and has not yet turned a profit.

The rally could continue as SpaceX prepares for an accelerated inclusion in the Nasdaq 100, Reuters notes. This will make it a major holding for passive funds and ETFs that track the index, creating a new source of demand for the stock. FTSE Russell and MSCI also plan to add SpaceX shares to their indices on June 26 and 29, respectively. According to estimates by brokerage firm Jefferies, inclusion in the FTSE Russell alone will result in an inflow of $2.68 billion from passive investors.

Wall Street is also keeping an eye on several other developments expected over the next two months, including the start of trading in SpaceX options on Tuesday and the expiration of lock-up periods for shares, Reuters notes.

“The company has significant growth potential ahead. This is certainly a long-term story, and I think the stock will need time to find its footing in the public market, but there are many exciting opportunities ahead,” John Belton, portfolio manager at Gabelli Funds, told Reuters.

“Everything looks much more orderly than I expected, and that’s a good thing,” Brian Mulberry, chief market strategist at Zacks Investment Management, told CNBC. “This isn’t some meme stock right from the start. In fact, people are adding it to their portfolios and holding onto it, rather than trying to flip it quickly.”

— According to Dan Niles, founder of Niles Investment Management, SpaceX shares still have upside potential as major indices prepare to include the company in their portfolios, CNBC reports. But once that happens, metrics such as valuation will start to matter, the financier warns. “As we saw during the meme stock frenzy, valuations can always rise much higher than you could ever imagine, but eventually they normalize,” Niles said.

— “The strong debut of [SpaceX] shares reflects genuine market enthusiasm about the company’s technological leadership and Starlink’s growing recurring revenue,” Mike Alves, manager of the VIDA Vision Fund, told Business Insider. “However, at current trading levels, the valuation appears overvalued given the near-term profitability outlook.”

“The hype surrounding AI has now overshadowed everything else and become the market’s main topic. I think this IPO is capitalizing on that. But I don’t believe the stock will keep rising indefinitely. In my view, valuations will eventually start to return to more realistic levels,” Scott Beekley, an analyst at Info-Tech Research Group, told Business Insider.

Elon Musk’s company has already received at least five ratings from Wall Street analysts, according to MarketWatch. Three recommend buying SpaceX shares, while two recommend selling. The consensus price target is $189.25—which is already below the current share price.

This article was AI-translated and verified by a human editor