SpaceX IPO and AI Surge Drive Market Rally

SpaceX’s initial public offering closed Friday at nearly $161 per share, valuing the company at over $2.1 trillion and making CEO Elon Musk the world’s first trillionaire. The debut raised $75 billion and helped push the S&P 500 and Nasdaq higher, according to market reports and Jim Cramer.

How did the SpaceX IPO impact the market?

The SpaceX stock opened at $150, exceeding the fixed offering price of $135. It rallied above $176 at one point before closing up 19%, which established the company as the sixth-largest U.S. public company.

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The success of the debut reduced market anxiety regarding the appetite for the largest IPO in history. The S&P 500 advanced 0.5% on Friday for a weekly gain of nearly 0.7%, while the Nasdaq rose 0.3% to end the week up 0.7%.

Did You Know? Elon Musk became the world’s first-ever trillionaire following the record-breaking SpaceX IPO.

Why are mega IPOs creating volatility?

Jim Cramer warned that mega IPOs could act as a headwind for the broader stock market. He noted that excessive equity supply may lead investors to sell existing holdings to raise cash for hot new offerings.

This volatility led the CNBC Investing Club to trim positions in Goldman Sachs, Qnity, Arm, Eaton, and Cardinal Health. The club increased its cash position to 12% to hedge against potential downturns.

Market observers are now watching two other upcoming mega IPOs. OpenAI filed its paperwork this past Monday, and Anthropic filed earlier this month.

What AI deals are driving tech stocks?

Corning announced Monday that Amazon will pay billions of dollars in coming years for optical fiber to expand its data center presence. Corning has previously signed similar agreements with Meta Platforms in January and Nvidia last month.

Jim Cramer on SpaceX IPO: Can't recall a deal done as well as this one

Oracle announced plans to raise $20 billion to fund AI infrastructure, though its shares fell nearly 9% on Thursday despite better-than-expected results. Meanwhile, Intel saw a weekly gain of more than 25% following a double upgrade to “buy” from Bank of America.

Arm Holdings jumped 11% over the week, while Nvidia remained flat and Broadcom fell less than 1%. Apple shares dropped more than 5% after the company unveiled an AI-enhanced Siri powered by Google’s Gemini.

Expert Insight: Samantha Carter notes that the shift from copper to optical fiber, as seen in the Amazon-Corning deal, addresses a critical limiting factor in computing power: energy consumption. This transition may signal a broader infrastructure pivot as AI demand moves from theoretical growth to immediate deployment.

How will inflation affect the Federal Reserve’s next move?

The consumer price index for May registered a 4.2% year-over-year increase, the highest reading in three years. Jim Cramer attributed these outliers to higher oil prices driven by the Iran war.

Traders expect the central bank to hold the benchmark interest rate steady during the June 17 meeting. This will be the first meeting led by Fed chairman Kevin Warsh, who was nominated by President Donald Trump in January.

While President Trump has expressed a desire for lower rates, market discussions have shifted. Investors are now weighing the possibility of rate hikes rather than cuts under Warsh’s leadership.

Frequently Asked Questions

How much capital did SpaceX raise in its IPO?
SpaceX raised $75 billion during its initial public offering.

Why did Apple shares decline last week?
Apple shares lost more than 5% after the company announced a new AI-enhanced Siri powered by Google’s Gemini at its annual developers conference.

What is the current market value of SpaceX?
SpaceX has a market value of more than $2.1 trillion, making it the sixth-largest public company in the U.S.

How do you think the Federal Reserve will handle interest rates under Kevin Warsh’s leadership?