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This article was written by

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

U.S. stocks ended higher on Friday afternoon as investors held out hope for a peace deal between Iran and the United States and as SpaceX shares surged in their debut, making it Wall Street’s biggest public listing in history. The United States and Iran signalled that an agreement to end their war was ‌close, with a ⁠senior U.S. ⁠administration official saying a draft proposal was in place that was liked by both sides. U.S. President Donald Trump has said several times since mid-March that a deal with Iran to end the war was close. Market participants were glued to shares of Elon Musk‘s SpaceX , which began trading on the Nasdaq on Friday. Its shares rose above the IPO price of $135 apiece, valuing the company at more than $2 trillion.

Shares of other space stocks, which have soared in the lead-up to the debut, eased on Friday, including Rocket Lab , Intuitive Machines and Planet Labs.

The reported progress in peace talks helped ⁠to lift sentiment, ‌said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

“There’s still hope for a peace deal. Trump called off the attacks … Third parties are confirming a peace deal is happening.”

That puts pressure ⁠on oil prices and reduces worries about higher inflation and interest rates, he said.

Investors were also looking ahead to next week’s Federal Reserve policy meeting, which will be the first under the leadership of Kevin Warsh.
According to preliminary data, the S&P 500 gained 36.30 points, or 0.51%, to end at 7,431.83 points, while the Nasdaq Composite gained 77.77 points, or 0.30%, to 25,887.43. The Dow Jones Industrial Average rose 353.42 points, or 0.71%, to 51,208.20. U.S. equity funds saw their first weekly outflow in three weeks, and earlier this week the technology index confirmed a correction. Analysts believe some of the weakness in U.S. stocks and bitcoin’s fall last week ‌could be due to traders trimming holdings ahead of SpaceX’s debut. SpaceX is now ranked among the biggest publicly listed U.S. companies.

Mike Dickson, head of research and quantitative strategies at Horizon Investments in Charlotte, North Carolina, said he was surprised by the lack of ⁠volatility in SpaceX so far, given the hype around the IPO. Shares of Tesla, another Musk company that trades at a premium to its earnings, ended higher.

Only about 3% to 4% of SpaceX’s shares are expected to be available for trading, with a large allocation to retail investors.

IPOs of AI companies OpenAI and Anthropic are also highly anticipated later in the year. SpaceX, which also includes Starlink and xAI, has already defied some Wall Street conventions.

Some analysts have voiced caution, however, over the fundamentals of the company, which posted more than $4 billion in annual losses last year.

Among the day’s decliners, Adobe slid after the exit of CFO Dan Durn.

SpaceX soared in its Nasdaq debut on Friday, sending its value past $2 trillion, as investors jumped at the chance to get a piece of Elon Musk‘s sprawling empire spanning rockets, internet service and AI after a record-setting IPO.

The launch was smoother than many observers expected, with trading kicking off late on Friday morning, swinging for most of the session between gains of 15% and 30% above Thursday’s pricing with little in the way of volatility. Shares ended the day at about $161 a share, up 19%, making SpaceX the sixth-largest U.S. company, though the final settlement price had yet to be determined.

The trading, which surpassed 500 million shares, or about $80 billion in volume, capped off a lead-up fraught with anxiety over the exchange’s ability to handle the launch, particularly after a recent swoon in technology shares that raised concerns about the stratospheric gains ‌in AI-linked names.

With mega-listings from ⁠AI heavyweights Anthropic ⁠and OpenAI waiting in the wings, market watchers worried that a flood of new IPOs could hurt market performance following a long period with a relative dearth of offerings. But investors across the spectrum, from large institutions to retail fans of Musk, ended the day euphoric.

“SpaceX is not only a record breaker in terms of money raised at a stock market debut, but it has also left other big names for dust. When the starting valuation is already pushing $2 trillion, adding that much value at the click of a finger is impressive,” said Dan Coatsworth, head of markets at AJ Bell.

Retail investors received about 20% of the allocation, far more than the typical IPO, with some even celebrating an allocation of one share.
The landmark listing cements Musk’s status as the first trillionaire ever – even though the firm posted a loss of nearly $5 billion last year and generated only a fraction of the revenue brought in by similarly valued tech giants. SpaceX executives, including President Gwynne Shotwell and Chief Financial Officer Bret ⁠Johnsen, celebrated ‌at the Nasdaq market site in New York’s Times Square after ringing the opening bell on Friday. Musk held a separate event for employees in Texas.

WORLD’S LARGEST IPO

The IPO is a culmination of Musk’s long-held ambitions in space and technology, and has stood out for rewriting Wall Street’s IPO playbook and drawing legions of retail investors into the ⁠market.

At $75 billion, the deal’s proceeds were more than double those of Saudi Aramco’s record-setting 2019 IPO.

Also Read | After record IPO, Musk’s SpaceX faces next test in market debut

The valuation could rise further should underwriters exercise their right to sell additional shares, a decision typically made within 30 days after the offering.

“Seeing the company that I joined when it was just some sketches on paper become this valuable is almost surreal,” said Tom Mueller, a founding SpaceX employee who spent 18 years at the company and is now CEO of Impulse Space, a spacecraft startup. As a shareholder, he said it was “almost surreal” to watch SpaceX’s IPO.

Although SpaceX may have to wait for entry into the S&P 500, its expected fast-track inclusion in the Nasdaq 100 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.

“We have to go back 100 years to get comparable entrepreneurs. He’s a visionary unlike others, and he executes extremely well,” said Joel Shulman, CEO of ERShares, which manages an ETF that has an exposure to SpaceX.

It will take about a month before ‌it gets added to that index under Nasdaq’s new fast-entry rules, as opposed to a typical wait of as much as a year.

Some analysts expect SpaceX’s debut to trigger a reshuffling of investor portfolios, creating selling pressure on other technology heavyweights as funds rotate into the stock. On Friday, shares of other space firms and satellite companies declined sharply, with Planet Labs down 8% and EchoStar down 14%.

A $28.5 TRILLION MARKET ⁠OPPORTUNITY

For all the excitement surrounding the IPO, determining what SpaceX is actually worth remains a difficult valuation exercise.

SpaceX said its market opportunity spans $28.5 trillion, a figure it called the largest in human history. With its leading position in space – the firm says its operation is responsible for more than four-fifths of the mass launched into orbit over the past three years – and revenues from Starlink, some investors said it has a strong foundation upon which to build.

With revenue of $18.7 billion in 2025, the company’s market cap puts its price-to-revenue ratio at roughly 110, far above other megacap stocks. Some analysts have already issued positive ratings on the company. Morningstar analysts this month said it is more fairly valued at around $780 billion, and CFRA on Friday started coverage with a sell rating.

“This is not a name you’re buying based on fundamentals. For me, the analogy is Amazon. This was a company that changed the way we live,” said Nancy Tengler, CEO and CIO of Laffer Tengler Investments. “If the stock drops to $100, that’s not ideal, but it wouldn’t change our long-term view. We want to participate.”

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Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.