SpaceX shares tumbled after the company’s first-ever earnings report as a public company revealed massive artificial intelligence spending that rattled Wall Street, despite strong revenue growth that beat expectations.
The company’s second-quarter capital expenditures soared to $18.4 billion, more than six times the prior-year level and well above the $13.22 billion that analysts had estimated, according to FactSet. Well over 80% of that spending went toward artificial intelligence infrastructure, according to CNBC, as Elon Musk’s space and satellite firm pivots aggressively into the competitive AI compute market.
SpaceX stock fell 7.5% in after-hours trading on August 4, wiping out earlier gains and leaving shares more than 20% below their first trade on June 12, according to CNBC. The broader selloff continued: by August 6, shares had fallen 50% from their June peak of $176, according to the BBC, trading well below the $135 initial public offering price.
The spending shock overshadowed otherwise robust results. Quarterly revenue jumped 92% to $7.8 billion, beating Wall Street’s estimate of $6.9 billion, and the company posted a net loss of $143 million in the quarter, down from larger losses earlier in the year. SpaceX’s AI business alone grew revenue 247% to $2.6 billion, but the unit sustained a $1.26 billion operating loss, according to CNBC.
On the earnings call, Musk told investors they were “underestimating” the company and sought to reframe the massive capex as a short-term investment with rapid payback. CFO Bret Johnsen said SpaceX was achieving “less than a one-year payback” on AI compute spending, and noted that in the first few weeks of the current quarter, SpaceX had already contracted an additional $6.7 billion in cloud services revenue, according to CNBC. Musk predicted SpaceX would hit $100 billion in annualized recurring revenue by December 2026, calling it a certainty: “That’s what we would achieve if we basically did nothing,” he said, according to CNBC.
Investors remained unconvinced. Analyst Matt Britzman at Hargreaves Lansdown said SpaceX “could soon resemble an AI infrastructure company with an extraordinary space business attached,” according to the BBC. Fabien Yip, an analyst at investment platform IG, told the BBC that it was “a stretch” to say the whole company was being underestimated, noting that the AI business is still losing money as spending rises and remains the only unit bleeding cash.
SpaceX’s situation mirrors a broader tech industry anxiety over AI spending. Major cloud providers and AI leaders including Alphabet, Amazon, Microsoft, and Meta are each spending over $200 billion annually on data centers and AI infrastructure, betting that massive upfront investments will prove profitable over time. The company’s challenge is distinct: SpaceX is reselling AI compute capacity to rivals like Google and Anthropic—deals worth up to $920 million and $1.25 billion per month, respectively, according to CNBC—while simultaneously building its own AI models and competing for market share.
The only currently profitable unit is Starlink, which generated $1.6 billion in revenue in Q2, while the space segment posted a $542 million loss on $962 million in revenue. Musk said SpaceX would likely hit $1 trillion in revenue by 2030, a year sooner than he predicted six weeks earlier, according to the BBC.
Sources
- CNBC — SpaceX AI capex figures, stock price movements, CFO and CEO quotes, cloud revenue deals, payback claims
- BBC News — Earnings results, stock performance, Musk’s “underestimating” comment, analyst commentary from Britzman, Wang, Yip, and Souvannarath
- AP News — SpaceX earnings loss, revenue figures, stock decline
- Business Insider — AI capex vs. analyst estimates
- Investing.com — AI revenue growth rate and Q2 loss figures
