By Reuters

(Reuters) - Shares of Elon Musk's SpaceX rose more than 10% in premarket trading on Tuesday, putting the company on course to overtake Amazon.com ‌in market value to become the world's fifth‑largest company, as it extended ‌a post-IPO rally.

The stock was last up 10.4% at $212.50, jumping more than 57% above its $135 IPO price and ​giving the company a market capitalization of nearly $2.8 trillion if gains hold. Amazon's valuation, meanwhile, stands at $2.66 trillion.

"We can say with certainty that this valuation makes absolutely no sense today. People are buying SpaceX in the expectation that others will buy too and push the price ‌higher - that's speculation," said Ipek ⁠Ozkardeskaya, senior market analyst at Swissquote Bank.

The company reported sales of $18.67 billion last year and a net loss of $4.94 billion after merging with ⁠money-losing xAI -- in contrast to many of Wall Street's big technology companies that have posted bumper numbers.

SpaceX options activity is set to begin as soon as Tuesday, with early activity expected ​to ​be heavy, volatile and likely expensive.

Analysts and portfolio ​managers said investors should brace for ‌volatility, particularly early on in SpaceX's life as a public company, due to its relatively small float and high valuation.

The rally could continue as SpaceX is set for fast-track inclusion in the Nasdaq 100, which 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.

FTSE Russell and MSCI are also set to ​add the stock to their indexes, effective June 26 ​and June 29, respectively.

SpaceX also ​said on Monday that its underwriters had exercised the "greenshoe" option to purchase ‌additional shares, increasing the total proceeds from ​its initial public ​offering to $85.7 billion from $75 billion that it raised last week.

More than $1.76 billion worth of SpaceX shares exchanged hands as of 05:02 a.m. ET, which was several times ​the trading volumes in Nvidia, ‌Microsoft, Tesla and Apple combined.

Other heavyweight technology stocks, including Nvidia and Alphabet, ​were trading slightly lower. Tesla was down 1.5%.

(Reporting by Shashwat Chauhan in Bengaluru; ​Editing by Nivedita Bhattacharjee and Shinjini Ganguli)

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