Amazon Retakes Lead Over SpaceX as the World's 5th Most Valuable Company. Here Are 3 Reasons Why It Won't Last.

Space Exploration Technologies (NASDAQ: SPCX) has been one of the most talked-about -- and most volatile -- stocks since it completed its initial public offering on June 12. SpaceX stock, at this writing, is trading 23% above its opening price of $150 and has a market cap of $2.43 trillion. It's also down 8.3% from its highest closing price, and after briefly flirting with an intraday $3 trillion valuation, SpaceX stock has slipped behind fifth-placed Amazon (NASDAQ: AMZN) on the list of the world's largest market caps.

SpaceX is already in rarefied air, having achieved the biggest IPO in history and raising more than $85 billion by going public. However, it's common for IPO stocks to slip in the weeks and months after their debut as initial hype gives way to quarterly reporting and more in-depth analysis.

Will Amazon continue to hold its lead over SpaceX? I say no, and here are three reasons why.

Image source: The Motley Fool.

1. SpaceX has a huge advantage with Starlink

SpaceX has a vibrant rocket business that has completed more than 660 missions. It deploys reusable rockets that are cheaper to operate and have shorter turnaround times.

However, the segment lost $657 million in 2025 and another $662 million in the first quarter of 2026. The company's Connectivity division is much more profitable. The segment, which includes SpaceX's network of 9,600 Starlink satellites in low Earth orbit, generated a profit of $4.42 billion in 2025 and $1.18 billion in Q1 2026.

Starlink is a unique business that provides internet and mobile connectivity to underserved and rural communities. It has a huge moat through its launch capability and satellite network, making it very costly for a competitor to steal market share. Management claims that Starlink's broadband sales have a total addressable market (TAM) of $870 billion, and Starlink mobile has a TAM of $740 billion.

2. AI is the biggest opportunity

Amazon has a mammoth distribution network, but it's also an important AI company. Amazon Web Services has the biggest share of the cloud computing market, with an estimated 29% of the space, and it is rapidly scaling to meet the overwhelming need for computing capacity.

SpaceX, meanwhile, absorbed another Elon Musk-owned company, xAI, earlier this year. The AI division includes the company's Grok large language model and the social media platform X (formerly Twitter) and is central to developing AI features that Musk uses in his other ventures, such as autonomous vehicles and robotics at Tesla (NASDAQ: TSLA).

Musk has signaled that AI under the SpaceX umbrella will operate very differently from how the company did when it was known as xAI, vowing to rebuild it "from the foundations up." SpaceX also recently completed a $60 billion purchase of an AI coding company, Cursor, which will allow it to use AI-assisted coding workflows to improve model training and inference.

SpaceX says that AI represents a $26.5 trillion market opportunity, with $22.7 trillion of that coming from AI enterprise applications -- products that make decisions and help automate workflows. If SpaceX can tap into a portion of that market, it will be richly rewarded by investors.

3. There could be another merger

Musk has reportedly speculated about the possibility of merging Tesla and SpaceX, and SpaceX President Gwynne Shotwell has said the move "might make Elon's life a little easier." Dan Ives of Wedbush Securities, who is a longtime Tesla bull, believes there's an 80% chance Tesla and SpaceX will merge within a year.

Both companies rank among the top 12 in the world by market cap. Together, they would have a valuation of about $3.8 trillion, putting SpaceX squarely in the lead in the race versus Amazon.

Patrick Sanders has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Tesla. The Motley Fool has a disclosure policy.