SpaceX rides stock boom to buy AI startup Cursor for $60 billion

SpaceX's stock is experiencing a meteoric rise, with shares climbing over 16% to more than $225 on Tuesday. This surge has propelled the valuation of Elon Musk's space exploration company to an astounding $2.8 trillion, momentarily exceeding that of Amazon. This rapid ascent follows significant gains of 19% on Friday and 20% on Monday.

The current stock price far outpaces even the most optimistic Wall Street forecasts. Analysts attribute this rally primarily to retail investors who were unable to participate in the initial public offering and are now aggressively acquiring shares at any price. These investors believe Musk's leadership will continue to drive the stock higher, irrespective of traditional valuation models, drawing parallels to Tesla's consistently high market valuation.

The limited availability of tradable shares, with less than 5% of the company's capital freely available, further exacerbates the demand. The majority of shares are held by Musk, early investors, and employees who face staggered selling restrictions.

Leveraging this market momentum, SpaceX is positioning itself as a significant player in the artificial intelligence field. The company announced its decision to exercise its option to acquire AI startup Cursor for $60 billion. This strategic move, following an April option agreement, aims to enhance SpaceX's AI capabilities and compete more effectively with established players like Google and Anthropic.

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SpaceX has exercised the option to acquire @cursor_ai in an all-stock transaction with the goal of building the world’s most useful AI models.